SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(A) of the
Securities Exchange Act of 1934 (Amendment No.__ )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential, for Use of
the Commission Only
(as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
SCUDDER CASH INVESTMENT TRUST
SCUDDER GNMA FUND
SCUDDER INVESTMENT TRUST
SCUDDER PORTFOLIO TRUST
SCUDDER U.S. TREASURY MONEY FUND
(Name of Registrant as Specified in Its Declaration of Trust)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials:
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identity the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement no.:
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(3) Filing Party:
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(4) Date Filed:
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Preliminary Copy
SCUDDER CASH INVESTMENT TRUST
SCUDDER GNMA FUND
SCUDDER INVESTMENT TRUST
SCUDDER PORTFOLIO TRUST
SCUDDER U.S. TREASURY MONEY FUND
IMPORTANT NEWS
SEPTEMBER 2, 1997
FOR SCUDDER FUND SHAREHOLDERS
While we encourage you to read the full text of the enclosed proxy
statement, here's a brief overview of some matters affecting your Fund which
require a shareholder vote.
Q & A: QUESTIONS AND ANSWERS
Q. WHAT IS HAPPENING?
A. Scudder, Stevens & Clark, Inc. ("Scudder"), your Fund's investment manager,
has agreed to form an alliance with Zurich Insurance Company ("Zurich").
Zurich is a leading international insurance and financial services
organization. As a result of the proposed alliance, there will be a change
in ownership of Scudder. In order for Scudder to continue to serve as
investment manager of your Fund, it is necessary for the Fund's
shareholders to approve a new investment management agreement. The
following pages give you additional information on Zurich and the proposed
new investment management agreement and certain other matters. The most
important matters to be voted upon by you are approval of the new
investment management agreement and the election of Trustees. The Board
members of your Fund, including those who are not affiliated with the Fund
or Scudder, recommend that you vote FOR these proposals.
Q. WHY AM I BEING ASKED TO VOTE ON THE PROPOSED NEW INVESTMENT MANAGEMENT
AGREEMENT.
A. The Investment Company Act of 1940, which regulates investment companies
such as the Fund, requires a vote whenever there is a change in control of
a fund's investment manager. Zurich's alliance with Scudder will result in
such a change of control and requires older approval of a new investment
management agreement with the Fund.
Q. HOW WILL THE SCUDDER-ZURICH ALLIANCE AFFECT ME AS A FUND SHAREHOLDER?
A. Your Fund and your Fund's investment objective will not change. You will
still own the same shares in the same Fund. The terms of the new investment
management agreement
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are the same in all material respects as the current investment management
agreement. Similarly, the other service arrangements between your Fund and
Scudder will not be affected. You should continue to receive the same level
of services that you have come to expect from Scudder over the years. If
shareholders do not approve the new investment management agreement, the
current investment management agreement will terminate upon the closing of
the transaction and the Board of Trustees will take such action as it deems
to be in the best interests of your Fund and its shareholders.
Q. WHY HAS SCUDDER DECIDED TO ENTER INTO THIS ALLIANCE?
A. Scudder believes that the Scudder-Zurich alliance will enable Scudder to
enhance its capabilities as a global asset manager. Scudder further
believes that the alliance will enable it to enhance its ability to deliver
the level of services currently provided to you and your Fund and to
fulfill its obligations under the new investment management agreement
consistent with current practices.
Q. WILL THE INVESTMENT MANAGEMENT FEES BE THE SAME?
A. Yes, the investment management fees paid by your Fund will remain the same.
Q. WILL I CONTINUE TO BE ABLE TO PURCHASE SHARES WITHOUT ANY SALES LOAD?
A. Yes, you will be able to continue to purchase shares of your Fund without
any sales load.]
Q. WHAT OTHER MATTERS AM I BEING ASKED TO VOTE ON?
A. In order to save your Fund the expense of a subsequent meeting, a vote is
also being sought for granting the Trustees discretionary authority to
convert the Fund into a "master/feeder" structure, for the amendment and
restatement of the Declaration of Trust applicable to your Fund, and for
the revision of certain fundamental investment policies. You are also being
asked to vote for the ratification of the Board's selection of the Fund's
accountants.
Q. HOW DO THE BOARD MEMBERS OF MY FUND RECOMMEND THAT I VOTE?
A. After careful consideration, the Board members of your Fund, including
those who are not affiliated with the Fund or Scudder, recommend that you
vote in favor of all of the proposals on the enclosed proxy card.
Q. WHOM DO I CALL FOR MORE INFORMATION?
A. Please call Shareholder Communications Corporation, your Fund's information
agent, at 1-800-733-8481.
Q. WILL THE FUND PAY FOR THE PROXY SOLICITATION AND LEGAL COSTS ASSOCIATED
WITH THIS TRANSACTION?
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A. No, Scudder will bear these costs.
ABOUT THE PROXY CARD
If you have more than one account in the Fund in your name at the same
address, you will receive separate proxy cards for each account but only
one proxy statement for the Fund. Please vote all issues on each proxy card
that you receive.
THANK YOU FOR MAILING YOUR PROXY CARDS PROMPTLY.
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SCUDDER CASH INVESTMENT TRUST
SCUDDER GNMA FUND
SCUDDER INVESTMENT TRUST
SCUDDER PORTFOLIO TRUST
SCUDDER U.S. TREASURY MONEY FUND
Two International Place
Boston, Massachusetts 02110
1-800-225-2470
September 2, 1997
Dear Shareholder:
On June 26, 1997, Scudder, Stevens & Clark ("Scudder") entered into an agreement
with Zurich Insurance Company ("Zurich") pursuant to which Scudder and Zurich
have agreed to form an alliance. Under the terms of the agreement, Zurich will
acquire a majority interest in Scudder, and Zurich Kemper Investments, Inc., a
Zurich subsidiary, will become part of Scudder. Scudder's name will be changed
to Scudder Kemper Investments, Inc. As a result of this transaction, it is
necessary for the shareholders of each of the funds for which Scudder acts as
investment manager, including your Fund, to approve a new investment management
agreement.
The following important facts about the transaction are outlined below:
- - - - - - - The transaction has no effect on the number of shares you own or the value
of those shares.
- - - - - - - The advisory fees and expenses paid by your Fund will not increase as a
result of this transaction. As is now the case, you will not pay sales
loads on purchases of shares of your Fund.
- - - - - - - The investment objective of your Fund will remain the same.
- - - - - - - The non-interested Trustees of your Fund have carefully reviewed the
proposed transaction and have concluded that the transaction should cause
no reduction in the quality of services provided to the Fund and should
enhance Scudder's ability to provide such services.
Shareholders are also being asked to approve certain other matters that have
been set forth in the Fund's Notice of Meeting. The Board members of your Fund
believe that each of the proposals set forth in the Notice of Meeting for your
Fund is important and recommend that you read the enclosed materials carefully
and then vote FOR all proposals.
Since all of the funds for which Scudder acts as investment manager are required
to conduct shareholder meetings, if you own shares of more than one fund, you
will receive more than one proxy card. Please sign and return each proxy card
you receive.
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Your vote is important. Please take a moment now to sign and return your proxy
card(s) in the enclosed postage-paid return envelope. If we do not receive your
executed proxy card(s) after a reasonable amount of time you may receive a
telephone call from our proxy solicitor, Shareholder Communications Corporation,
reminding you to vote your shares.
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Respectfully,
Daniel Pierce
President
Scudder GNMA Fund
Scudder Investment Trust
Scudder Portfolio Trust
David S. Lee
President
Scudder Cash Investment Trust
Scudder U.S. Treasury Money Fund
SHAREHOLDERS ARE URGED TO SIGN THE PROXY CARD(S) AND RETURN IT IN THE
POSTAGE-PAID ENVELOPE TO ENSURE A QUORUM AT THE MEETING. YOUR VOTE IS IMPORTANT
REGARDLESS OF THE SIZE OF YOUR SHARE- HOLDINGS.
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SCUDDER CASH INVESTMENT TRUST
SCUDDER GNMA FUND
SCUDDER INVESTMENT TRUST
SCUDDER PORTFOLIO TRUST
SCUDDER U.S. TREASURY MONEY FUND
Notice of Special Meeting of Shareholders
Please take notice that Special Meetings of Shareholders (each a "Special
Meeting") of each Scudder Trust listed above (each a "Trust" and, collectively,
the "Trusts"), the series of which are Scudder Classic Growth Fund, Scudder
Large Company Growth Fund, and Scudder Growth and Income Fund of Scudder
Investment Trust; and Scudder Income Fund, Scudder High Yield Bond Fund and
Scudder Balanced Fund of Scudder Portfolio Trust (each a "Fund," and,
collectively, where applicable, with those Trusts that do not have any series,
the "Funds") will be held jointly at the offices of Scudder, Stevens & Clark,
Inc. ("Scudder"), 13th Floor, Two International Place, Boston, Massachusetts
02110, on October 24, 1997, at 9:30 a.m., Eastern time, for the following
purposes:
(1) To approve or disapprove a new investment management agreement between
each Fund and Scudder;
(2) For each Trust, to elect Trustees;
(3) To approve or disapprove the Board's discretionary authority to convert
each Fund to a master/feeder fund structure through a sale or transfer
of assets or otherwise;
(4)(A) For each Trust, to approve or disapprove certain provisions of a
proposed Amended and Restated Declaration of Trust requiring a
two-thirds vote of shareholders;
(B) For each Trust, to approve or disapprove certain other provisions of a
proposed Amended and Restated Declaration of Trust requiring a majority
vote of shareholders;
(5) For each Fund, to approve or disapprove the revision of certain
fundamental investment policies; and
(6) To ratify or reject the selection of Coopers & Lybrand L.L.P. as the
independent accountants for each of the Funds for each Fund's current
fiscal year.
The appointed proxies will vote on any other business as may properly come
before the Special Meeting or any adjournments thereof.
Holders of record of shares of beneficial interest of each Fund at the
close of business on August 24, 1997 are entitled to vote at the Special Meeting
and at any adjournments thereof.
In the event that the necessary quorum to transact business or the vote
required to approve or reject any proposal is not obtained at the Special
Meeting with respect to one or more
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Trusts or, where applicable, Funds, the persons named as proxies may propose one
or more adjournments of the Special Meeting in accordance with applicable law,
to permit further solicitation of proxies. Any such adjournment as to a matter
requiring, respectively, a Trust-wide or a Fund by Fund vote will require the
affirmative vote of the holders of a majority of the concerned Trust's (for a
Trust-wide vote) or, where applicable, the Fund's (for a Fund by Fund vote),
shares present in person or by proxy at the Special Meeting. The persons named
as proxies will vote in favor of such adjournment those proxies which they are
entitled to vote in favor and will vote against any such adjournment those
proxies to be voted against that proposal.
By Order of the Board of Trustees,
Thomas F. McDonough, Secretary
September 2, 1997
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IMPORTANT -- We urge you to sign and date the enclosed proxy card and return it
in the enclosed addressed envelope which requires no postage and is intended for
your convenience. Your prompt return of the enclosed proxy card may save the
necessity and expense of further solicitations to ensure a quorum at the Special
Meetings. If you can attend the Special Meetings and wish to vote your shares in
person at that time, you will be able to do so.
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SCUDDER CASH INVESTMENT TRUST
SCUDDER GNMA FUND
SCUDDER INVESTMENT TRUST
SCUDDER PORTFOLIO TRUST
SCUDDER U.S. TREASURY MONEY FUND
Two International Place, Boston, Massachusetts 02110
JOINT PROXY STATEMENT
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General
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Trustees (the "Board") of each of the Scudder Trusts
listed above (each a "Trust" and, collectively, the "Trusts"), the series of
which are Scudder Classic Growth Fund, Scudder Large Company Growth Fund, and
Scudder Growth and Income Fund of Scudder Investment Trust; and Scudder Income
Fund, Scudder High Yield Bond Fund and Scudder Balanced Fund of Scudder
Portfolio Trust (each a "Fund," and, collectively, where applicable, with those
Trusts that do not have any series, the "Funds") for use at the Special Meetings
of Shareholders of each Trust, to be held jointly at the offices of Scudder,
Stevens & Clark, Inc. ("Scudder"), 13th Floor, Two International Place, Boston,
Massachusetts 02110, on October 24, 1997 at 9:30 a.m., Eastern time, and at any
and all adjournments thereof (the "Special Meeting"). (In the descriptions of
the various proposals below, the word "fund" is sometimes used to mean
investment companies or series thereof in general, and not the Funds whose proxy
statement this is.)
This Proxy Statement, the Notice of Special Meeting and the proxy cards are
first being mailed to shareholders on or about September 2, 1997 or as soon as
practicable thereafter. Any shareholder giving a proxy has the power to revoke
it by mail (addressed to the Secretary at the principal executive office of the
Funds, c/o Scudder, Stevens & Clark, Inc., Two International Place, Boston,
Massachusetts 02110), or in person at the Special Meeting, by executing a
superseding proxy or by submitting a notice of revocation to the Fund. All
properly executed proxies received in time for the Special Meeting will be voted
as specified in the proxy or, if no specification is made, in favor of each
proposal referred to in the Proxy Statement.
The presence at any shareholders' meeting, in person or by proxy, of the
holders of a majority of the shares entitled to be cast of a Trust (for a
Trust-wide vote) or a Fund (for a Fund by Fund vote) shall be necessary and
sufficient to constitute a quorum for the transaction of business requiring,
respectively, Trust-wide or Fund by Fund voting. In the event that the necessary
quorum to transact business or the vote required to approve or reject any
proposal is not obtained at the Special Meeting with respect to one or more
Funds, the persons named as proxies may propose one or more adjournments of the
Special Meeting in accordance with applicable law to permit further solicitation
of proxies with respect to any proposal which did not receive the vote necessary
for its passage or to obtain a quorum. With respect to those proposals for which
there is represented a sufficient number of votes in favor, actions taken at the
Special
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Meeting will be effective irrespective of any adjournments with respect to any
other proposals. Any such adjournment as to a matter requiring, respectively, a
Trust-wide or a Fund by Fund vote will require the affirmative vote of the
holders of a majority of the concerned Trust's (for a Trust-wide vote) or Fund's
(for a Fund by Fund vote) shares present in person or by proxy at the Special
Meeting. The persons named as proxies will vote in favor of such adjournment
those proxies which they are entitled to vote in favor and will vote against any
such adjournment those proxies to be voted against that proposal. For purposes
of determining the presence of a quorum for transacting business at the Special
Meeting, abstentions and broker "non-votes" will be treated as shares that are
present but which have not been voted. Broker non-votes are proxies received by
a Fund from brokers or nominees when the broker or nominee has neither received
instructions from the beneficial owner or other persons entitled to vote nor has
discretionary power to vote on a particular matter. Accordingly, shareholders
are urged to forward their voting instructions promptly.
Proposals 1 and 5 each requires the affirmative vote of a "majority of the
outstanding voting securities" of each Fund. The terms "majority of the
outstanding voting securities" as defined in the Investment Company Act of 1940,
as amended (the "1940 Act"), and as used in this Proxy Statement, means: the
affirmative vote of the lesser of (1) 67% of the voting securities of each Fund
present at the meeting if more than 50% of the outstanding shares of the Fund
are present in person or by proxy or (2) more than 50% of the outstanding shares
of each Fund. Approval of Proposal 2 requires the affirmative vote of a
plurality of the shares of each Trust voting. The requisite vote for Proposals
3, 4(A) and 4(B) is governed by the applicable Declaration of Trust. Approval of
Proposal 3 requires the affirmative vote of a majority of the shares of each
Fund. Approval of Proposal 4(A) requires the affirmative vote of two thirds of
shares of the Trust outstanding and entitled to vote, while approval of Proposal
4(B) requires the affirmative vote of a majority of the outstanding voting
securities, as defined above, of the Trust. Approval of Proposal 6 requires the
affirmative vote of a majority of the shares of each Fund voting.
Abstentions will have the effect of a "no" vote on all proposals. Broker
non-votes will have the effect of a "no" vote for Proposals 1, 3 and 5, which
require the approval of a specified percentage of the outstanding shares of each
Fund and Proposals 4(A) and 4(B), which require the approval of a specified
percentage of the outstanding shares of each Trust, if such vote is determined
on the basis of obtaining the affirmative vote of more than 50% of the
outstanding shares of the Fund. Broker non-votes will not constitute "yes" or
"no" votes, and will be disregarded in determining the voting securities
"present" if such vote is determined on the basis of the affirmative vote of 67%
of the voting securities of the Fund, or the Trust, as the case may be, present
at the Special Meeting with respect to Proposals 1, 3, 4(B) and 5.
Shareholders of each Fund will vote separately with respect to each of
Proposals 1, 3, 5 and 6; and Shareholders of each Trust will vote together on
proposals 2, 4(A), and 4(B).
The following table summarizes those voting requirements:
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<TABLE>
<CAPTION>
<S> <C> <C>
Shareholders Entitled to Vote Vote Required for Approval
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Proposal 1 Shareholders of each Fund vote Approved by a "majority of the
(Approval of new Investment separately outstanding voting securities" of
Management Agreement) each Fund
Proposal 2 Shareholders of each Trust vote Each nominee must be elected by a
(Election of Trustees) together for each nominee (if a plurality of the shares voting at
Trust has several Funds, the Special Meeting
shareholders of all Funds vote
together as a single class)
Proposal 3 Shareholders of each Fund vote Approved by a majority of the
(Approval of discretionary separately shares of each Fund
authority to convert to
master/feeder fund structure)
Proposal 4(A) Shareholders of each Trust vote Approved by the vote of two-thirds
(Approval of a portion of the together (if a Trust has several of shares of the Trust outstanding
Amended and Restated Declaration Funds, shareholders of all Funds and entitled to vote
of Trust) vote together as a single class)
Proposal 4(B) Shareholders of each Trust vote Approved by a "majority of the
(Approval of a portion of the together (if a Trust has several outstanding voting securities" of
Amended and Restated Declaration Funds, shareholders of all Funds the Trust
of Trust) vote together as a single class)
Proposal 5 Shareholders of each Fund vote Approved by a "majority of the
(Approval of the revision of separately outstanding voting securities" of
certain fundamental investment each Fund
policies)
Proposal 6 Shareholders of each Fund vote Approved by a majority of the
(Ratification of selection of separately shares voting at the Special Meeting
Accountants)
</TABLE>
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Holders of record of the shares of beneficial interest of each Fund at the
close of business on August 24, 1997 (the "Record Date"), as to any matter on
which they are entitled to vote, will be entitled to one vote per share on all
business of the Special Meeting. The table below sets forth the number of shares
outstanding for each Fund as of June 30, 1997
Number of Shares Outstanding
Name of the Fund as of June 30, 1997
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Scudder Cash Investment Trust 1,430,702,948
Scudder GNMA Fund 26,844,293
Scudder Classic Growth Fund 2,048,137
Scudder Growth and Income Fund 210,477,108
Scudder Large Company Growth Fund 11,473,679
Scudder Income Fund 45,069,019
Scudder High Yield Bond Fund 8,009,734
Scudder Balanced Fund 8,418,686
Scudder U.S. Treasury Money Fund 398,570,345
Each Trust provides periodic reports to all of its shareholders which
highlight relevant information including investment results and a review of
portfolio changes. You may receive an additional copy of the most recent annual
report for each Fund and a copy of any more recent semi-annual report, without
charge, by calling 800-225-5163 or writing the Fund, c/o Scudder, Stevens &
Clark, Inc., Two International Place, Boston, Massachusetts 02110.
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PROPOSAL 1: APPROVAL OF NEW
INVESTMENT MANAGEMENT AGREEMENT
Introduction
Scudder acts as the investment manager to each Fund pursuant to investment
management agreements entered into by each Fund and Scudder (each a "Current
Investment Management Agreement" and, collectively, the "Current Investment
Management Agreements"). (Scudder is sometimes referred to in this proxy
statement as the "Investment Manager.") On June 26, 1997, Scudder entered into a
Transaction Agreement (the "Transaction Agreement") with Zurich Insurance
Company ("Zurich") pursuant to which Scudder and Zurich have agreed to form an
alliance. Under the terms of the Transaction Agreement, Zurich will acquire a
majority interest in Scudder, and Zurich Kemper Investments, Inc. ("ZKI"), a
Zurich subsidiary, will become part of Scudder. Scudder's name will be changed
to Scudder Kemper Investments, Inc. ("Scudder Kemper"). The foregoing are
referred to as the "Transactions." ZKI, a Chicago-based investment adviser and
the adviser to the Kemper funds, has approximately $80 billion under management.
The headquarters of Scudder Kemper will be in New York. Edmond D. Villani,
Scudder's Chief Executive Officer, will continue as Chief Executive Officer of
Scudder Kemper and will become a member of Zurich's Corporate Executive Board.
Consummation of the Transactions would constitute an "assignment," as that
term is defined in the 1940 Act, of each Fund's Current Investment Management
Agreement with Scudder. As required by the 1940 Act, each of the Current
Investment Management Agreements provide for its automatic termination in the
event of its assignment. In anticipation of the Transactions, a new investment
management agreement (each a "New Investment Management Agreement" and,
collectively, the "New Investment Management Agreements," together with the
Current Investment Management Agreements, the "Investment Management
Agreements") between each Fund and Scudder Kemper is being proposed for approval
by shareholders of each Fund. A copy of the master form of the New Investment
Management Agreement is attached hereto as Exhibit A. THE NEW INVESTMENT
MANAGEMENT AGREEMENT FOR EACH FUND IS IN ALL MATERIAL RESPECTS ON THE SAME TERMS
AS THE CORRESPONDING CURRENT INVESTMENT MANAGEMENT AGREEMENT. Conforming changes
are being recommended to the New Investment Management Agreement in order to
promote consistency among all of the funds currently advised by Scudder and to
permit ease of administration. The material terms of each Current Investment
Management Agreement are described under "Description of the Current Investment
Management Agreement" below.
Board of Trustees Recommendation
On August 6, 1997, the Board of each Trust, including Trustees who are not
parties to such agreement or "interested persons" (as defined under the 1940
Act) of any such party, voted to approve the New Investment Management
Agreements and to recommend their respective approval to shareholders.
For information about the Boards' deliberations and the reasons for their
recommendation, please see "Board of Trustees Evaluation" below.
The Board of each Trust recommends that its shareholders vote in favor of
the approval of the New Investment Management Agreement for each Fund.
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Board of Trustees Evaluation
On June 26, 1997, representatives of Scudder advised the Non-interested
Trustees of each Trust by means of a telephone conference call that Scudder had
entered into the Transaction Agreement. At that time, Scudder representatives
described the general terms of the proposed Transactions and the perceived
benefits for the Scudder organization and for its investment advisory clients.
Scudder subsequently furnished the Non-interested Trustees additional
information regarding the proposed Transactions, including information regarding
the terms of the proposed Transactions, and information regarding the Zurich and
ZKI organizations. In a series of subsequent telephone conference calls and
in-person meetings, the Non-interested Trustees discussed this information among
themselves and with representatives of Scudder and Zurich. They were assisted in
their review of this information by their independent legal counsel and also
consulted with a representative of the Funds' independent auditors and with an
independent consultant knowledgeable in mutual fund industry matters.
In the course of these discussions, Scudder advised the Non-interested
Trustees that it did not expect that the proposed Transactions would have a
material effect on the operations of the Funds or their shareholders. Scudder
has advised the Non-interested Trustees that the Transaction Agreement, by its
terms, does not contemplate any changes in the structure or operations of the
Funds. Scudder representatives have informed the Trustees that Scudder intends
to maintain the separate existence of the funds that Scudder and ZKI manage in
their respective distribution channels. Scudder has also advised the
Non-interested Trustees that although it expects that various portions of the
ZKI organization would be combined with Scudder's operations, the senior
executives of Scudder overseeing those operations will remain largely unchanged.
It is possible, however, that changes in certain personnel currently involved in
providing services to the Funds may result from future efforts to combine the
strengths and efficiencies of both firms. In their discussions with the
Trustees, Scudder representatives also emphasized the strengths of the Zurich
organization and its commitment to provide the new Scudder Kemper organization
with the resources necessary to continue to provide high quality services to the
Funds and the other investment advisory clients of the new Scudder Kemper
organization.
The Board of each Trust was advised that Scudder intends to rely on Section
15(f) of the 1940 Act, which provides a non-exclusive safe harbor for an
investment adviser to an investment company or any of the investment adviser's
affiliated persons (as defined under the 1940 Act) to receive any amount or
benefit in connection with a change in control of the investment adviser so long
as two conditions are met. First, for a period of three years after the
transaction, at least 75% of the board members of the investment company must
not be "interested persons" of the investment company's investment adviser or
its predecessor adviser. On or prior to the consummation of the Transactions,
each of the Boards, assuming the election of the nominees that you are being
asked to elect in "Proposal 2: Election of Trustees," would be in compliance
with this provision of Section 15(f). (See "Proposal 2: Election of Trustees").
Second, an "unfair burden" must not be imposed upon the investment company as a
result of such transaction or any express or implied terms, conditions or
understandings applicable thereto. The term "unfair burden" is defined in
Section 15(f) to include any arrangement during the two-year period after
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the transaction whereby the investment adviser, or any interested person of any
such adviser, receives or is entitled to receive any compensation, directly or
indirectly, from the investment company or its shareholders (other than fees for
bona fide investment advisory or other services) or from any person in
connection with the purchase or sale of securities or other property to, from or
on behalf of the investment company (other than bona fide ordinary compensation
as principal underwriter for such investment company). No such compensation
agreements are contemplated in connection with the Transactions. Scudder has
undertaken to pay the costs of preparing and distributing proxy materials to,
and of holding the meeting of, the Funds' shareholders as well as other fees and
expenses in connection with the Transactions, including the fees and expenses of
legal counsel and consultants to the Funds and the Non-interested Trustees.
During the course of their deliberations, the Non-interested Trustees
considered a variety of factors, including the nature, quality and extent of the
services furnished by Scudder to the Funds; the necessity of Scudder maintaining
and enhancing its ability to retain and attract capable personnel to serve the
Funds; the investment record of Scudder in managing the Funds; the increased
complexity of the domestic and international securities markets; Scudder's
profitability from advising the Funds; possible economies of scale; comparative
data as to investment performance, advisory fees and other fees, including
administrative fees, and expense ratios; the risks assumed by Scudder; the
advantages and possible disadvantages to the Funds of having an adviser of the
Funds which also serves other investment companies as well as other accounts;
possible benefits to Scudder from serving as manager to the Funds and from
affiliates of Scudder serving the Funds in various other capacities; current and
developing conditions in the financial services industry, including the entry
into the industry of large and well capitalized companies which are spending and
appear to be prepared to continue to spend substantial sums to engage personnel
and to provide services to competing investment companies; and the financial
resources of Scudder and the continuance of appropriate incentives to assure
that Scudder will continue to furnish high quality services to the Funds.
In addition to the foregoing factors, the Non-interested Trustees gave
careful consideration to the likely impact of the Transactions on the Scudder
organization. In this regard, the Non-interested Trustees considered, among
other things, the structure of the Transactions which affords Scudder executives
substantial autonomy over Scudder's operations and provides substantial equity
participation and incentives for many Scudder employees; Scudder's and Zurich's
commitment to Scudder's paying compensation adequate to attract and retain top
quality personnel; Zurich's strategy for the development of its asset management
business through Scudder; information regarding the financial resources and
business reputation of Zurich; and the complementary nature of various aspects
of the business of Scudder and the Zurich Kemper organization and the intention
to maintain separate Scudder and Kemper brands in the mutual fund business.
Based on the foregoing, the Non-interested Trustees concluded that the
Transactions should cause no reduction in the quality of services provided to
the Funds and believe that the Transactions should enhance Scudder's ability to
provide such services. The Non-interested Trustees considered the foregoing
factors with respect to each of the Funds.
On August 6, 1997, the Trustees of each Trust, including the Non-interested
Trustees of each Trust approved the New Investment Management Agreement.
- 16 -
<PAGE>
Information Concerning the Transactions and Zurich
Under the Transaction Agreement, Zurich will pay $866.7 million in cash to
acquire two-thirds of Scudder's outstanding shares and will contribute ZKI to
Scudder for additional shares, following which Zurich will have a 79.1% fully
diluted equity interest in the combined business. Zurich will then transfer a
9.6% fully diluted equity interest in Scudder Kemper to a compensation pool for
the benefit of Scudder and ZKI employees, as well as cash and warrants on Zurich
shares for award to Scudder employees, in each case subject to five-year vesting
schedules. After giving effect to the Transactions, current Scudder stockholders
will have a 29.6% fully diluted equity interest in Scudder Kemper and Zurich
will have a 69.5% fully diluted interest in Scudder Kemper. Scudder's name will
be changed to Scudder Kemper Investments, Inc.
The purchase price for Scudder or for ZKI in the Transactions is subject to
adjustment based on the impact to revenues of non-consenting clients, and will
be reduced if the annualized investment management fee revenues (excluding the
effect of market changes, but taking into account new assets under management)
from clients at the time of closing, as a percentage of such revenues as of June
30, 1997 (the "Revenue Run Rate Percentage"), is less than 90%.
At the closing, Zurich and the other stockholders of Scudder Kemper will
enter into a Second Amended and Restated Security Holders Agreement (the "New
SHA"). Under the New SHA, Scudder stockholders will be entitled to designate
three of the seven members of the Scudder Kemper board of directors and two of
the four members of an Executive Committee, which will be the primary
management-level committee of Scudder Kemper. Zurich will be entitled to
designate the other four members of the Scudder Kemper board and other two
members of the Executive Committee.
The names, addresses and principal occupations of the initial
Scudder-designated directors of Scudder Kemper are as follows: Lynn S. Birdsong,
345 Park Avenue, New York, New York, Managing Director of Scudder; Cornelia M.
Small, 345 Park Avenue, New York, New York, Managing Director of Scudder; and
Edmond D. Villani, 345 Park Avenue, New York, New York, President and Chief
Executive Officer and Managing Director of Scudder.
The names, addresses and principal occupations of the initial
Zurich-designated directors of Scudder Kemper are as follows: Lawrence W. Cheng,
Mythenquai 2, Zurich, Switzerland, Chief Investment Officer for Investments and
Institutional Asset Management and the corporate functions of Securities and
Real Estate for Zurich; Steven M. Gluckstern, Mythenquai 2, Zurich, Switzerland,
responsible for Reinsurance, Structured Finance, Capital Market Products and
Strategic Investments, and a member of the Corporate Executive Board of Zurich;
Rolf Hueppi, Mythenquai 2, Zurich, Switzerland, Chairman of the Board and Chief
Executive Officer of Zurich; and Markus Rohrbasser, Mythenquai 2, Zurich,
Switzerland, Chief Financial Officer and member of the Corporate Executive Board
of Zurich.
The initial Scudder-designated Executive Committee members will be Messrs.
Birdsong and Villani (Chairman). The initial Zurich-designated Executive
Committee members will be Messrs. Cheng and Rohrbasser.
- 17 -
<PAGE>
The New SHA requires the approval of a majority of the Scudder-designated
directors for certain decisions, including changing the name of Scudder Kemper,
effecting an initial public offering before April 15, 2005, causing Scudder
Kemper to engage substantially in non-investment management and related
business, making material acquisitions or divestitures, making material changes
in Scudder Kemper's capital structure, dissolving or liquidating Scudder Kemper,
or entering into certain affiliated transactions with Zurich. The New SHA also
provides for various put and call rights with respect to Scudder Kemper stock
held by current Scudder employees, limitations on Zurich's ability to purchase
other asset management companies outside of Scudder Kemper, rights of Zurich to
repurchase Scudder Kemper stock upon termination of employment of Scudder Kemper
personnel, and registration rights for stock held by continuing Scudder
stockholders.
The Transactions are subject to a number of conditions, including approval
by Scudder stockholders; the Revenue Run Rate Percentages of Scudder and ZKI
being at least 75%; Scudder and ZKI having obtained director and shareholder
approvals from U.S.-registered funds representing 90% of assets of such funds
under management as of June 30, 1997; the absence of any restraining order or
injunction preventing the Transactions, or any litigation challenging the
Transactions that is reasonably likely to result in an injunction or
invalidation of the Transactions; and the continued accuracy of the
representations and warranties contained in the Transaction Agreement. The
Transactions are expected to close during the fourth quarter of 1997.
The information set forth above concerning the Transactions has been
provided to the Trusts by Scudder, and the information set forth below
concerning Zurich has been provided to the Trusts by Zurich.
Founded in 1872, Zurich is a multinational, public corporation organized
under the laws of Switzerland. Its home office is located at Mythenquai 2, 8002
Zurich, Switzerland. Historically, Zurich's earnings have resulted from its
operations as an insurer as well as from its ownership of its subsidiaries and
affiliated companies (the "Zurich Insurance Group"). Zurich and the Zurich
Insurance Group provide an extensive range of insurance products and services,
and have branch offices and subsidiaries in more than 40 countries throughout
the world. Zurich Insurance Group is particularly strong in the insurance of
international companies and organizations. Over the past few years, Zurich's
global presence, particularly in the United States, has been strengthened by
means of selective acquisitions.
Description of the Current Investment Management Agreements
Under each Current Investment Management Agreement, Scudder provides each
Fund with continuing investment management services. The Investment Manager also
determines which securities shall be purchased, held, or sold, and what portion
of each Fund's assets shall be held uninvested, subject to each Trust's
Declaration of Trust, By-Laws, investment policies and restrictions, the
provisions of the 1940 Act, and such policies and instructions as the Trustees
may determine.
Each Current Investment Management Agreement provides that the Investment
Manager will provide portfolio management services, place portfolio transactions
in accordance with policies expressed in each Fund's registration statement, pay
each Fund's office rent, render
- 18 -
<PAGE>
significant administrative services on behalf of each Fund (not otherwise
provided by third parties) necessary for each Fund's operating as an open-end
investment company including, but not limited to, preparing reports to and
meeting materials for each Trust's Board of Trustees and reports and notices to
Fund shareholders; supervising, negotiating contractual arrangements with, to
the extent appropriate, and monitoring the performance of various third-party
and affiliated service providers to each Fund (such as each Fund's transfer and
pricing agents, fund accounting agent, custodian, accountants and others) and
other persons in any capacity deemed necessary or desirable to Fund operations;
preparing and making filings with the Securities and Exchange Commission (the
"SEC" or the "Commission") and other regulatory and self-regulatory
organizations, including but not limited to, preliminary and definitive proxy
materials, post-effective amendments to the Registration Statement, semi-annual
reports on Form N-SAR and notices pursuant to Rule 24f-2 under the 1940 Act;
overseeing the tabulation of proxies by each Fund's transfer agent; assisting in
the preparation and filing of each Fund's federal, state and local tax returns;
preparing and filing each Fund's federal excise tax returns pursuant to Section
4982 of the Internal Revenue Code of 1986, as amended; providing assistance with
investor and public relations matters; monitoring the valuation of portfolio
securities and the calculation of net asset value; monitoring the registration
of shares of each Fund under applicable federal and state securities laws;
maintaining or causing to be maintained for each Fund all books, records and
reports and any other information required under the 1940 Act, to the extent
such books, records and reports and other information are not maintained by each
Fund's custodian or other agents of each Fund; assisting in establishing
accounting policies of each Fund; assisting in the resolution of accounting
issues that may arise with respect to each Fund's operations and consulting with
each Fund's independent accountants, legal counsel and other agents as necessary
in connection therewith; establishing and monitoring each Fund's operating
expense budgets; reviewing each Fund's bills; processing the payment of bills
that have been approved by an authorized person; assisting each Fund in
determining the amount of dividends and distributions available to be paid by
each Fund to its shareholders, preparing and arranging for the printing of
dividend notices to shareholders, and providing the transfer and dividend paying
agent, the custodian, and the accounting agent with such information as is
required for such parties to effect the payment of dividends and distributions;
and otherwise assisting each Fund in the conduct of its business, subject to the
direction and control of each Trust's Board of Trustees.
Under each Current Investment Management Agreement, each Fund is
responsible for other expenses, including organizational expenses (including
out-of-pocket expenses, but not including the Investment Manager's overhead or
employee costs); brokers' commissions or other costs of acquiring or disposing
of any portfolio securities of each Fund; legal, auditing and accounting
expenses; payment for portfolio pricing or valuation services to pricing agents,
accountants, bankers and other specialists, if any; taxes and governmental fees;
the fees and expenses of each Fund's transfer agent; expenses of preparing share
certificates and any other expenses, including clerical expenses, of issuance,
offering, distribution, sale, redemption or repurchase of shares; the expenses
of and fees for registering or qualifying securities for sale; the fees and
expenses of Non-interested Trustees; the cost of printing and distributing
reports, notices and dividends to current shareholders; and the fees and
expenses of each Fund's custodians, subcustodians, accounting agent, dividend
disbursing agents and registrars. Each Fund may arrange to have third parties
assume all or part of the expenses of sale, underwriting and distribution of
shares of each Fund. Each Fund is also responsible for expenses of shareholders'
- 19 -
<PAGE>
and other meetings, the cost of responding to shareholders' inquiries, and its
expenses incurred in connection with litigation, proceedings and claims and the
legal obligation it may have to indemnify officers and Trustees of each Trust
with respect thereto. Each Fund is also responsible for the maintenance of books
and records which are required to be maintained by each Fund's custodian or
other agents of each Trust; telephone, telex, facsimile, postage and other
communications expenses; any fees, dues and expenses incurred by each Fund in
connection with membership in investment company trade organizations; expenses
of printing and mailing prospectuses and statements of additional information of
each Fund and supplements thereto to current shareholders; costs of stationery;
fees payable to the Investment Manager and to any other Fund advisors or
consultants; expenses relating to investor and public relations; interest
charges, bond premiums and other insurance expense; freight, insurance and other
charges in connection with the shipment of each Fund's portfolio securities; and
other expenses.
The Investment Manager is responsible for the payment of the compensation
and expenses of all Trustees, officers and executive employees of each Fund
(including each Fund's share of payroll taxes) affiliated with the Investment
Manager and making available, without expense to each Fund, the services of such
Trustees, officers and employees as may duly be elected officers of each Trust,
subject to their individual consent to serve and to any limitations imposed by
law. Each Fund is responsible for the fees and expenses (specifically including
travel expenses relating to Fund business) of Trustees not affiliated with the
Investment Manager. Under each Current Investment Management Agreement, the
Investment Manager also pays each Fund's share of payroll taxes, as well as
expenses, such as travel expenses (or an appropriate portion thereof), of
Trustees and officers of each Trust who are directors, officers or employees of
the Investment Manager, except to the extent that such expenses relate to
attendance at meetings of the Board of Trustees of each Trust, or any committees
thereof or advisers thereto, held outside Boston, Massachusetts or New York, New
York. During each Fund's most recent fiscal year, no compensation, direct or
otherwise (other than through fees paid to the Investment Manager), was paid or
became payable by each Trust to any of its officers or Trustees who were
affiliated with the Investment Manager.
In return for the services provided by the Investment Manager as investment
manager, and the expenses it assumes under each Current Investment Management
Agreement, each Fund pays the Investment Manager a management fee which is
accrued daily and payable monthly. The management fee rate for each Fund is set
forth in the table below. As of the end of each Fund's last fiscal year, each
Fund had net assets and paid an aggregate management fee to the Investment
Manager during such period as set forth below.
- 20 -
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
- - - - - - ------------------------ --------------- ---------------------- ----------------------------------------- ------------------
Aggregate
Fiscal Net Management Management Fee
Fund Year Assets Fee Rate Paid
- - - - - - ------------------------ --------------- ---------------------- ----------------------------------------- ------------------
Scudder Cash 6/30/97 $1,430,623,517 .50 of 1% of 1st $250 million $5,942,044
Investment Trust .45 of 1% on next $250 million
.40 of 1% on next $500 million
.35 of 1% in excess of $1 billion
Scudder GNMA Fund 3/31/97 .65 of 1% of 1st $200 million $2,532,357
.60 of 1% on next $300 million
.55 of 1% in excess of $500 million
Scudder Classic Growth 8/31/97 .70% $0
Fund
Scudder Growth and 12/31/96 $4,186,481,205 .60 of 1% 1st $500 million $17,628,873
Income Fund .55 of 1% on next $500 million
.50 of 1% on next $500 million
.475 of 1% on next $500 million
.45 of 1% on next $1 billion
.425 of 1% on next $1.5 billion
.405 of 1% in excess of $4.5 billion
Scudder Large Company 10/31/96 $221,253,633 .70% $1,447,537
Growth Fund
Scudder Income Fund 12/31/96 $578,519,502 .65 of 1% 1st $200 million $3,516,782
.60 of 1% on next $300 million
.55 of 1% in excess of $500 million
Scudder High Yield 2/28/97 $73,523,094 .70% $0
Bond Fund
Scudder Balanced Fund 12/31/96 $109,541,542 .70% $340,364
Scudder U.S. Treasury 6/30/97 $398,597,054 .50% $893,661
Money Fund
- - - - - - ------------------------ --------------- ---------------------- ----------------------------------------- ------------------
</TABLE>
- 21 -
<PAGE>
Each Current Investment Management Agreement further provides that the
Investment Manager shall not be liable for any error of judgment or mistake of
law or for any loss suffered by any Fund in connection with matters to which
such agreement relates, except a loss resulting from willful misfeasance, bad
faith or gross negligence on the part of the Investment Manager in the
performance of its duties or from reckless disregard by the Investment Manager
of its obligations and duties under such agreement.
Each Current Investment Management Agreement may be terminated without
penalty upon sixty (60) days' written notice by either party. Each Fund may
agree to terminate its Current Investment Management Agreement either by the
vote of a majority of the outstanding voting securities of the Fund, or by a
vote of the Board of Trustees. As stated above, each Current Investment
Management Agreement automatically terminates in the event of its assignment.
Scudder has acted as the Investment Manager for each Fund since each Fund
commenced operations as shown below. Also shown below is the date of each
Current Investment Management Agreement, the date when each Current Investment
Management Agreement was last approved by the Trustees and the shareholders of
each Fund and the date to which each Current Investment Management Agreement was
last continued. Each Current Investment Management Agreement was last submitted
to shareholders prior to its becoming effective, as required by the 1940 Act.*
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Commencement Date of Last Approved by Date
of Current Investment -------------------------- Continued
Fund Operations Management Agreement Trustees Shareholders to
---- ------------ -------------------- -------- ------------ ---------
Scudder Cash 7/23/76 11/6/96 8/13/96 11/5/96 9/30/98
Investment Trust
Scudder GNMA Fund 7/5/85 11/14/90 8/12/97 11/13/90 9/30/98
Scudder Classic 9/9/96 9/9/96 8/12/97 9/4/96 9/30/98
Growth Fund
Scudder Growth and 5/31/29 5/1/97 4/8/97 9/21/90 9/30/98
Income Fund
Scudder Large 5/15/91 5/9/91 8/12/97 5/8/91 9/30/98
Company Growth
Fund
Scudder Income Fund 4/24/28 11/14/90 8/12/97 11/13/90 9/30/98
Scudder High Yield 6/28/96 6/28/96 8/12/97 6/27/96 9/30/98
Bond Fund
Scudder Balanced 1/14/93 12/28/92 8/12/97 1/4/93 9/30/98
Fund
</TABLE>
- 22 -
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Commencement Date of Last Approved by Date
of Current Investment -------------------------- Continued
Fund Operations Management Agreement Trustees Shareholders to
---- ------------ -------------------- -------- ------------ ---------
Scudder U.S. 11/23/81 11/14/90 8/12/97 11/13/90 9/30/98
Treasury Money Fund
</TABLE>
____________________
* An Investment Management Agreement which is changed from a prior agreement
solely to reduce the fee payable by the Fund does not require shareholder
approval prior to becoming effective. In those cases, the date shown for
shareholder approval may be later than the effective date.
The New Investment Management Agreements
The New Investment Management Agreement for each Fund will be dated as of
the date of the consummation of the Transactions, which is expected to occur in
the fourth quarter of 1997, but in no event later than February 28, 1998. Each
New Investment Management Agreement will be in effect for an initial term ending
on the same date as would the corresponding Current Investment Management
Agreement but for the Transactions, and may continue thereafter from year to
year only if specifically approved at least annually by the vote of "a majority
of the outstanding voting securities" of each Fund, or by the Board and, in
either event, the vote of a majority of the Non-interested Trustees, cast in
person at a meeting called for such purpose. In the event that shareholders of a
Fund do not approve the New Investment Management Agreement, the corresponding
Current Investment Management Agreement will remain in effect until the closing
of the Transactions, at which time it would terminate. In such event, the Board
of such Fund will take such action as it deems to be in the best interests of
each Fund and its shareholders. In the event the Transactions are not
consummated, Scudder will continue to provide services to each Fund in
accordance with the terms of each Current Investment Management Agreement for
such periods as may be approved at least annually by the Board, including a
majority of the Non-interested Trustees.
Differences Between the Current and New Investment Management Agreements
The New Investment Management Agreements are substantially the same as the
Current Investment Management Agreements in all material respects. The principal
changes that have been made are summarized below. The New Investment Management
Agreements reflect conforming changes that have been made in order to promote
consistency among all funds currently advised by Scudder and to permit ease of
administration. For example, the New Investment Management Agreements for
Scudder GNMA Fund, Scudder Large Company Growth Fund, Scudder Income Fund,
Scudder Balanced Fund and Scudder U.S. Treasury Fund would update the list of
types of services that may be provided by the Investment Manager to include the
monitoring of accounting agents. In addition, the New Investment Management
Agreement for these same Funds would specify that the Investment Manager is not
responsible for payment of the fees and expenses of a Fund's accounting agent.
These Funds, as well as Scudder Classic Growth Fund and Scudder High Yield Bond
Fund, also propose to add "accounting agents" to the list of service providers
to which the Investment Manager must provide information in connection with the
payment of dividends and distributions. The New Investment Management Agreements
also clarify that purchase and sale opportunities, which are suitable for more
than one client of the Investment Manager, will be allocated by the Investment
Manager in an equitable manner.
In addition, the New Investment Management Agreements for each Fund (except
for the Cash Investment Trust, Classic Growth Fund and the High Yield Bond Fund,
all of which already included such provision with
- 23 -
<PAGE>
respect to Scudder) would clarify the scope of the licensing provisions
governing the use of the Scudder name. Specifically, each New Investment
Management Agreement identifies Scudder Kemper as the exclusive licensee of the
rights to use and sublicense the names "Scudder," "Scudder Kemper Investments,
Inc.," and "Scudder, Stevens & Clark, Inc." (together the "Scudder Marks").
Under this license, each Trust, with respect to each of its Funds, if any, has
the non-exclusive right to use and sublicense the Scudder name and marks as part
of its name, and to use the Scudder Marks in the Trust's investment products and
services. This license continues only as long as the New Investment Management
Agreement is in place, and only as long as Scudder Kemper continues to be a
licensee of the Scudder Marks from Scudder Trust Company, which is the owner and
licensor of the Scudder Marks. As a condition of the license, each Trust, on
behalf of each of its Funds, if any, undertakes certain responsibilities and
agrees to certain restrictions, such as agreeing not to challenge the validity
of the Scudder Marks or ownership by Scudder Trust Company and the obligation to
use the name within commercially reasonable standards of quality. In the event
the agreement is terminated, each Trust, on behalf of each of its Funds, if any,
must not use a name likely to be confused with those associated with the Scudder
Marks.
Other conforming changes include: deletion of the Investment Manager's
potential responsibility for monitoring the calculation and payment of
distributions to shareholders (for all Funds except Scudder Cash Investment
Trust and Scudder Growth and Income Fund, which do not contain such provision);
deletion of a provision not permitting application of the Current Investment
Management Agreement to newly-created series (for the GNMA Fund, Income Fund and
the U.S. Treasury Fund); and the inclusion of a provision clarifying that the
New Investment Management Agreement supersedes all prior agreements (for Scudder
Classic Growth Fund and Scudder High Yield Bond Fund).
Investment Manager
Scudder is one of the most experienced investment counsel firms in the
United States. It was established in 1919 as a partnership and was restructured
as a Delaware corporation in 1985. The principal source of Scudder's income is
professional fees received from providing continuing investment advice. Scudder
provides investment counsel for many individuals and institutions, including
insurance companies, endowments, industrial corporations and financial and
banking organizations.
Scudder is a Delaware corporation. Daniel Pierce* is the Chairman of the
Board of Scudder, Edmond D. Villani# is President and Chief Executive Officer of
Scudder, Stephen R. Beckwith#, Lynn S. Birdsong#, Nicholas Bratt#, E. Michael
Brown*, Mark S. Casady*, Linda C. Coughlin*, Margaret D. Hadzima*, Jerard K.
Hartman#, Richard A. Holt@, John T. Packard+, Kathryn L. Quirk#, Cornelia M.
Small# and Stephen A. Wohler* are the other members of the Board of Directors of
Scudder (see footnote for symbol key).. The principal occupation of each of the
above named individuals is serving as a Managing Director of Scudder.
All of the outstanding voting and nonvoting securities of Scudder are held
of record by Stephen R. Beckwith, Juris Padegs#, Daniel Pierce and Edmond D.
Villani in their capacity as the representatives of the beneficial owners of
such securities (the "Representatives"), pursuant to a Security Holders'
Agreement among
- - - - - - --------------------------
* Two International Place, Boston, Massachusetts
# 345 Park Avenue, New York, New York
+ 101 California Street, San Francisco, California
@ Two Prudential Plaza, 180 North Stetson, Suite 5400, Chicago, Illinois
- 24 -
<PAGE>
Scudder, the beneficial owners of securities of Scudder and such
Representatives. Pursuant to the Security Holders' Agreement, the
Representatives have the right to reallocate shares among the beneficial owners
from time to time. Such reallocations will be at net book value in cash
transactions. All Managing Directors of Scudder own voting and nonvoting stock
and all Principals of Scudder own nonvoting stock.
Directors, officers and employees of Scudder from time to time may enter
into transactions with various banks, including the Fund's custodian bank. It is
Scudder's opinion that the terms and conditions of those transactions will not
be influenced by existing or potential custodial or other Fund relationships.
Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of Scudder,
computes net asset value for each Fund. Scudder Service Corporation ("SSC"),
also a subsidiary of Scudder, is the transfer, shareholding and dividend-paying
agent for each Fund. Scudder Trust Company ("STC"), an affiliate of Scudder,
provides subaccounting and recordkeeping services for shareholder accounts in
certain retirement and employee benefit plans. The table below sets forth for
each Fund the respective fees paid to SFAC, SSC and STC during the last fiscal
year of each Fund.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Aggregate Fee Paid Aggregate Fee Paid
to SFAC During Last to SSC During Last Aggregate Fee Paid to STC
Fund Fiscal Year Fiscal Year Fiscal Year During Last Fiscal Year
- - - - - - ---- ----------- ------------------- ---------------------- ---------------------
Scudder Cash Investment 6/30/97 $105,874 $2,907,025 $1,699,834
Trust
Scudder GNMA Fund 3/31/97 $112,508 $601,383 $176,074
Scudder Classic Growth 8/31/97 $9,479** $11,622** $561**
Fund
Scudder Growth and Income 12/31/96 $249,566 $4,264,447 $2,482,721
Fund
Scudder Large Company 10/31/96 $56,114 $275,078 $128,483
Growth Fund
Scudder Income Fund 12/31/96 $97,111 $693,316 $872,411
Scudder High Yield Bond 2/28/97 $0 $0 $0
Fund
Scudder Balanced Fund 12/31/96 $42,622 $201,637 $188,390
</TABLE>
- 25 -
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Aggregate Fee Paid Aggregate Fee Paid
to SFAC During Last to SSC During Last Aggregate Fee Paid to STC
Fund Fiscal Year Fiscal Year Fiscal Year During Last Fiscal Year
- - - - - - ---- ----------- ------------------- ---------------------- ---------------------
Scudder U.S. Treasury 6/30/97 $50,134 $710,792 $525,821
Money Fund
</TABLE>
___________________
**Projected
SFAC, SSC and STC will continue to provide fund accounting, transfer
agency, subaccounting and recordkeeping services to the Funds under the current
arrangements if the New Investment Management Agreements are approved.
Exhibit B sets forth the fees and other information regarding other
investment companies advised by Scudder.
Brokerage Commissions on Portfolio Transactions
To the maximum extent feasible, Scudder places orders for portfolio
transactions through Scudder Investor Services, Inc., Two International Place,
Boston, Massachusetts 02110 (the "Distributor") (a corporation registered as a
broker/dealer and a subsidiary of Scudder), which in turn places orders on
behalf of the Funds with issuers, underwriters or other brokers and dealers. In
selecting brokers and dealers with which to place portfolio transactions for a
Fund, Scudder will not consider sales of shares of funds currently advised by
ZKI, although it may place such transactions with brokers and dealers that sell
shares of funds currently advised by ZKI. The Distributor receives no
commissions, fees or other remuneration from the Fund for this service.
Allocation of portfolio transactions is supervised by Scudder.
Required Vote
Approval of this Proposal as to any Fund requires the affirmative vote of a
"majority of the outstanding voting securities" of the Fund. The Trustees of
each Trust recommend that the shareholders of each Fund vote in favor of this
Proposal 1.
PROPOSAL 2: ELECTION OF TRUSTEES FOR EACH TRUST
At the Special Meeting, eight Trustees are to be elected to constitute the
Board of each Trust. For election of Trustees at the Special Meeting, each
Trust's Board of Trustees has approved the nomination of the following
individuals: Henry P. Becton, Jr., Dawn-Marie Driscoll, Peter B. Freeman, George
M. Lovejoy, Jr., Dr. Wesley W. Marple, Jr., Daniel Pierce, Kathryn L. Quirk and
Jean C. Tempel.
- 26 -
<PAGE>
The persons named as proxies on the enclosed proxy card will vote for the
election of the nominees named above unless authority to vote for any or all of
the nominees is withheld in the proxy. Each Trustee so elected will serve as a
Trustee of the respective Trust until the next meeting of shareholders, if any,
called for the purpose of electing Trustees and until the election and
qualification of a successor or until such Trustee sooner dies, resigns or is
removed as provided in the Declaration of Trust of each Trust.
Each of the nominees has indicated that he or she is willing to serve as a
Trustee. If any or all of the nominees should become unavailable for election
due to events not now known or anticipated, the persons named as proxies will
vote for such other nominee or nominees as the Trustees may recommend. The
following table sets forth certain information concerning the current Trustees
and the nominees. Unless otherwise noted, each of the Trustees and nominees has
engaged in the principal occupation listed in the following table for more than
five years, but not necessarily in the same capacity.
NOMINEES:
- - - - - - --------
<TABLE>
<CAPTION>
<S> <C>
Present Office with the Trust (Date Nominee Became Trustee),
Principal Occupation or
Name (Age) Employment and Directorships
- - - - - - ---------- ------------------------------------------------------------
Henry P. Becton, Jr. (53) Trustee, Scudder Cash Investment Trust (1990), Scudder Investment Trust
(1990) and Scudder Portfolio Trust (1990). President and General Manager,
WGBH Educational Foundation; Director: Becton Dickinson and Company; The
A.H. Belo Company; The Public Broadcasting Service; and several private
companies. Former Director, The Providence Journal Company. Mr. Becton
serves on the Boards of an additional 3 Trusts or Corporations whose Funds
are advised by Scudder.
Dawn-Marie Driscoll (50) Trustee, Scudder Cash Investment Trust (1987), Scudder U.S. Treasury Money
Fund (1987) and Scudder GNMA Fund (1988). Executive Fellow, Center for
Business Ethics, Bentley College; President, Driscoll Associates; Director
of several private companies. Prior to 1990, law partner (Palmer & Dodge)
and Vice President of Corporate Affairs and General Counsel, Filene's. Ms.
Driscoll serves on the Boards of an additional 5 Trusts or Corporations
whose Funds are advised by Scudder.
Peter B. Freeman (65) Trustee, Scudder Cash Investment Trust (1980) and Scudder U.S. Treasury
Money Fund (1997). Corporate Director and Trustee; Director, The A.H. Belo
Company, Trustee, Eastern Utilities Associates (electric utility holding
company); Director, AMICA Life Insurance Co.; Director, AMICA Insurance Co.
Formerly: President, Fields Point Management Co. and Goelet Estate Co.
(private investment management companies); Former Director, The Providence
Journal Company (multi-media company). Mr. Freeman serves on the Boards of
an additional 8 Trusts or Corporations whose Funds are advised by Scudder.
George M. Lovejoy, Jr. (67) Trustee, Scudder Cash Investment Trust (1976), Scudder GNMA Fund (1985),
Scudder Investment Trust (1984), Scudder Portfolio Trust (1975)
</TABLE>
- 27 -
<PAGE>
NOMINEES:
- - - - - - --------
<TABLE>
<CAPTION>
<S> <C>
Present Office with the Trust (Date Nominee Became Trustee),
Principal Occupation or
Name (Age) Employment and Directorships
- - - - - - ---------- ------------------------------------------------------------
and Scudder U.S. Treasury Money Fund (1981). President and Director, Fifty
Associates (real estate investment trust); Director or Trustee of various
for-profit and not-for-profit organizations. Prior to 1994, Chairman,
Meredith & Grew, Inc. (real estate services company). Mr. Lovejoy serves on
the Boards of an additional 4 Trusts or Corporations whose Funds are advised
by Scudder.
Dr. Wesley W. Marple, Jr. (65) Trustee, Scudder GNMA Fund (1985), Scudder Investment Trust (1984) and
Scudder Portfolio Trust (1982). Professor of Business Administration,
Northeastern University, teaching financial management and investment
banking. Trustee, Eastern Utilities Association (electric utilities holding
company). Dr. Marple serves on the Boards of an additional 3 Trusts or
Corporations whose Funds are advised by Scudder.
Daniel Pierce* (63) President and Trustee, Scudder GNMA Fund (1985), Scudder Investment Trust
(1984) and Scudder Portfolio Trust (1968). Chairman of the Board and
Managing Director of Scudder, Stevens & Clark, Inc. Director, Fiduciary
Trust Company (bank and trust company) and Fiduciary Company Incorporated
(bank and trust company). Mr. Pierce serves on the Boards of an additional
15 Trusts or Corporations whose Funds are advised by Scudder.
Kathryn L. Quirk* (44) Trustee, Scudder Cash Investment Trust (1996) and Scudder Investment Trust
(1997); and, Vice President, Scudder GNMA Fund. Managing Director of
Scudder, Stevens & Clark, Inc. Ms. Quirk serves on the Boards of an
additional 9 Trusts or Corporations whose Funds are advised by Scudder.
Jean C. Tempel (54) Trustee, Scudder GNMA Fund (1994), Scudder Investment Trust (1994), Scudder
Portfolio Trust (1994) and Scudder U.S. Treasury Money Fund (1994).
Managing Partner, Technology Equity Partners; Special Limited Partner, TL
Ventures (a venture capital fund); Director and Vice Chairman, Cambridge
Technology Partners, Inc. (a systems integration on client/server platform
company); Director, Sonesta International Hotels, Inc.; Director, Centocor,
Inc. (diagnostic and pharmaceutical biotechnology company); Director of
several private companies. Prior to 1993, President of Safeguard
Scientific, Inc. and Executive Vice President and Chief Operating Officer of
The Boston Company. Ms. Tempel serves on the Boards of an additional 3
Trusts or Corporations whose Funds are advised by Scudder.
</TABLE>
- - - - - - ----------------
* Trustees considered by the Trusts and their counsel to be "interested
persons" (as defined in the 1940 Act) of the Trusts or of their
investment manager because of their employment by the Investment
Manager and, in some cases, holding offices with the Trust.
- 28 -
<PAGE>
CURRENT TRUSTEES NOT
STANDING FOR
RE-ELECTION:
<TABLE>
<CAPTION>
<S> <C>
Present Office with the Trust (Date Nominee Became Trustee),
Principal Occupation or
Name (Age) Employment and Directorships
- - - - - - ---------- ------------------------------------------------------------
E. Michael Brown* (56) Trustee, Scudder Cash Investment Trust (1996), Scudder GNMA Fund (1995),
Scudder Portfolio Trust (1997) and Scudder U.S. Treasury Money Fund (1995).
Managing Director of Scudder, Stevens & Clark, Inc. Mr. Brown serves on the
Boards of an additional 2 Trusts or Corporations whose Funds are advised by
Scudder.
David S. Lee* (63) President and Trustee, Scudder Cash Investment Trust (1975) and Scudder U.S.
Treasury Money Fund (1981); Vice President and Trustee, Scudder GNMA Fund
(1985) and Scudder Portfolio Trust (1971); and, Vice President, Scudder
Investment Trust; Managing Director, Scudder, Stevens & Clark, Inc.; Trustee
Emeritus, New England Medical Center. Mr. Lee serves on the Boards of an
additional 12 Trusts or Corporations whose Funds are advised by Scudder.
</TABLE>
- - - - - - ----------------
* Trustees considered by the Trusts and their counsel to be "interested
persons" (as defined in the 1940 Act) of the Trusts or of their
investment manager because of their employment by the Investment
Manager and, in some cases, holding offices with the Trust.
The table below sets forth the number of shares of each Fund owned directly
or beneficially by the nominees to and the Trustees of the relevant Board of
Trustees as of June 30, 1997.
- 29 -
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- - - - - - ------------------------- --------- ----- ----------- ------- ---------- ------- --------- --------- -------- ------ -------------
All Current
Trustees and
Fund Name (1) Becton Brown Driscoll Freeman Lee Lovejoy Marple Pierce Quirk Temple Officers as
a Group
- - - - - - ------------------------- --------- ----- ----------- ------- ---------- ------- --------- --------- -------- ------ -------------
- - - - - - ------------------------- --------- ----- ----------- ------- ---------- ------- --------- --------- -------- ------ -------------
Scudder Cash
Investment Trust 1064 -- -- 265,212 77,666(2) 10,739 97,292(3) 60,410(4) 8,502(5) -- 9,803,527(6)
- - - - - - ------------------------- --------- ----- ----------- ------- ---------- ------- --------- --------- -------- ------ -------------
- - - - - - ------------------------- --------- ----- ----------- ------- ---------- ------- --------- --------- -------- ------ -------------
Scudder GNMA Fund 68* -- 199 -- 1,012(7) 1,518 312 -- 152 824 170,970(8)
- - - - - - ------------------------- --------- ----- ----------- ------- ---------- ------- --------- --------- -------- ------ -------------
- - - - - - ------------------------- --------- ----- ----------- ------- ---------- ------- --------- --------- -------- ------ -------------
Scudder Investment Trust
Scudder Classic
Growth Fund 285 N/A 960 -- N/A -- 86* -- -- -- 126,327(9)
Scudder Growth
and Income Fund 3,833(10) N/A 11,240(11) 4,109 N/A 24,428 1,098 303(12) -- 2,055 1,638,021(13)
Scudder Large Company
Growth Fund 3,119 N/A 1,295 -- N/A 372 364(14) 198(15) -- 3,621 301,875(16)
- - - - - - ------------------------- --------- ----- ----------- ------- ---------- ------- --------- --------- -------- ------ -------------
- - - - - - ------------------------- --------- ----- ----------- ------- ---------- ------- --------- --------- -------- ------ -------------
Scudder Portfolio Trust
Scudder Income Fund 1,730 -- 412 720 14,544(17) 823 1,804(18) 4,338(19) 221 1,308 930,892(20)
Scudder High Yield
Bond Fund 77* -- 1,194 -- -- 631 117* -- -- -- 146,819(21)
Scudder Balanced Fund 2,122 -- -- -- -- 514 87* -- -- 4,531 1,564,741(22)
- - - - - - ------------------------- --------- ----- ----------- ------- ---------- ------- --------- --------- -------- ------ -------------
- - - - - - ------------------------- --------- ----- ----------- ------- ---------- ------- --------- --------- -------- ------ -------------
Scudder U.S. Treasury
Money Fund 1,000* -- 5,661 -- 34,278(23) 58,423 2,665 -- -- 17,575 1,704,075(24)
- - - - - - ------------------------- --------- ----- ----------- ------- ---------- ------- --------- --------- -------- ------ -------------
</TABLE>
* Shares acquired after 6/30/97
(1) The information as to beneficial ownership is based on statements furnished
to the Trusts by each Trustee and nominee. Unless otherwise noted,
beneficial ownership is based on sole voting and investment power. Each
Trustee's and nominee's individual shareholdings of any Fund constitute
less than 1/4 of 1% of the shares outstanding of such Fund.
(2) Mr. Lee's total in Scudder Cash Investment Trust includes 58,825 shares
owned by members of his family and 7,000 shares held in a fiduciary
capacity as to which he shares investment and voting power.
(3) Dr. Marple's total in Scudder Cash Investment Trust includes 21,483 shares
held with shared investment and voting power.
(4) Mr. Pierce's total in Scudder Cash Investment Trust includes 59,429 shares
held with shared investment and voting power.
(5) Ms. Quirk's total in Scudder Cash Investment Trust includes 3,262 shares
held with shared investment and voting power.
(6) As a group on June 30, 1997, the Trustees and officers owned beneficially
0.69% of the outstanding shares of Scudder Cash Investment Trust of which
294,096 shares were held with sole investment and voting power, 94,624
shares were held with shared investment and voting power, and 9,414,807
shares were held with sole voting but no investment power. Shares held with
sole voting but no investment power are shares held in profit sharing and
401(k) plans for which Jerard K. Hartman serves as Trustee.
- 30 -
<PAGE>
(7) Mr. Lee's shares in Scudder GNMA Fund are held in a fiduciary capacity as
to which he shares investment and voting power.
(8) As a group on June 30, 1997, the Trustees and officers owned beneficially
0.64% of the outstanding shares of Scudder GNMA Fund of which 2,853 shares
were held with sole investment and voting power, 1,012 shares were held
with shared investment and voting power, and 167,105 shares were held with
sole voting but no investment power. Shares held with sole voting but no
investment power are shares held in profit sharing and 401(k) plans for
which Jerard K. Hartman serves as Trustee.
(9) As a group on June 30, 1997, the Trustees and officers owned beneficially
6.16% of the outstanding shares of Scudder Classic Growth Fund of which 285
shares were held with sole investment and voting power, and 126,042 shares
were held with sole voting but no investment power. Shares held with sole
voting but no investment power are shares held in profit sharing and 401(k)
plans for which Jerard K. Hartman serves as Trustee.
(10) Mr. Becton's total in Scudder Growth and Income Fund includes 65 shares
held with shared investment and voting power.
(11) Ms. Driscoll's total in Scudder Growth and Income Fund includes 2,304
shares held with shared investment and voting power.
(12) Mr. Pierce's shares in Scudder Growth and Income Fund are held in a
fiduciary capacity as to which he shares investment and voting power.
(13) As a group on June 30, 1997, the Trustees and officers owned beneficially
0.78% of the outstanding shares of Scudder Growth & Income Fund of which
34,232 shares were held with sole investment and voting power, 25,205
shares were held with shared investment and voting power, and 1,578,584
shares were held with sole voting but no investment power. Shares held with
sole voting but no investment power are shares held in profit sharing and
401(k) plans for which Jerard K. Hartman serves as Trustee.
(14) Dr. Marple's shares in Scudder Large Company Growth Fund are held with
shared investment and voting power and 58 shares are held with sole
investment and voting power which were acquired after June 30, 1997.
(15) Mr. Pierce's shares in Scudder Large Company Growth Fund are held with
shared investment and voting power.
(16) As a group on June 30, 1997, the Trustees and officers owned beneficially
2.64% of the outstanding shares of Scudder Large Company Growth Fund of
which 7,112 shares were held with sole investment and voting power, 1,275
shares were held with shared investment and voting power, and 293,488
shares were held with sole voting but no investment power. Shares held with
sole voting but no investment power are shares held in profit sharing and
401(k) plans for which Jerard K. Hartman serves as Trustee.
(17) Mr. Lee's total in Scudder Income Fund includes 7,955 shares held in a
fiduciary capacity as to which he shares investment and voting power.
(18) Dr. Marple's total in Scudder Income Fund includes 466 shares held with
shared investment and voting power.
(19) Mr. Pierce's total in Scudder Income Fund includes 2,608 shares held in a
fiduciary capacity as to which he shares investment and voting power.
(20) As a group on June 30, 1997, the Trustees and officers owned beneficially
2.07% of the outstanding shares of Scudder Income Fund of which 17,185
shares were held with sole investment and voting power, 11,267 shares were
held with shared investment and voting power, and 902,440 shares were held
with sole voting but no investment power. Shares held with sole voting but
no investment power are shares held in profit sharing and 401(k) plans for
which Jerard K. Hartman serves as Trustee.
(21) As a group on June 30, 1997, the Trustees and officers of Scudder High
Yield Bond Fund owned beneficially 1.83% of the outstanding shares of
Scudder High Yield Bond Fund of which 631 shares were held with sole
investment and voting power, and 146,188 shares were held with sole voting
but no investment power. Shares held with sole voting but no investment
power are shares held in profit sharing and 401(k) plans for which Jerard
K. Hartman serves as Trustee.
- 31 -
<PAGE>
(22) As a group on June 30, 1997, the Trustees and officers of Scudder Balanced
Fund owned beneficially 18.59% of the outstanding shares of Scudder
Balanced Fund of which 7,167 shares were held with sole investment and
voting power and 1,557,574 shares were held with sole voting but no
investment power. Shares held with sole voting but no investment power are
shares held in profit sharing and 401(k) plans for which Jerard K. Hartman
serves as Trustee.
(23) Mr. Lee's shares in Scudder U.S. Treasury Money Fund are held in a
fiduciary capacity as to which he shares investment and voting power.
(24) As a group on June 30, 1997, the Trustees and officers of Scudder U.S.
Treasury Money Fund owned beneficially 0.43% of the outstanding shares of
Scudder U. S. Treasury Money Fund of which 81,659 shares were held with
sole investment and voting power, 34,278 shares were held with shared
investment and voting power, and 1,588,138 shares were held with sole
voting but no investment power. Shares held with sole voting but no
investment power are shares held in profit sharing and 401(k) plans for
which Jerard K. Hartman serves as Trustee.
- 32 -
<PAGE>
Certain accounts for which the Investment Manager acts as investment
adviser owned 1,724,820 shares in the aggregate, or 6.43% of the outstanding
shares of Scudder GNMA Fund on June 30, 1997. The Investment Manager may be
deemed to be a beneficial owner of such shares but disclaims any beneficial
ownership in such shares.
Certain accounts for the Investment Manager acts as investment adviser
owned 122,315 shares in the aggregate, or 5.97% of the outstanding shares of
Scudder Classic Growth Fund. The Investment Manager may be deemed to be the
beneficial owner of such shares but disclaims any beneficial ownership in such
shares.
As of June 30, 1997, 920,626 shares in the aggregate, 44.95% of the
outstanding shares of Scudder Classic Growth Fund, were held in the name of
State Street Bank & Trust Co., Custodian for the Scudder Pathway Series Balanced
Portfolio, One Heritage Drive, Quincy, MA 02171, who may be deemed to be the
beneficial owner of certain of these shares, but disclaims any beneficial
ownership therein.
As of June 30, 1997, 12,409,854 shares in the aggregate, 5.90% of the
outstanding shares of the Scudder Growth & Income Fund were held in the name of
Charles, Schwab & Co., 101 Montgomery Street, San Francisco, CA 94104, who may
be deemed to be the beneficial owner of certain of these shares, but disclaims
any beneficial ownership therein.
Certain accounts for which the Investment Manager acts as investment
adviser owned 995,338 shares in the aggregate, or 8.68% of the outstanding
shares of Scudder Large Company Growth Fund on June 30, 1997. The Investment
Manager may be deemed to be a beneficial owner of such shares but disclaims any
beneficial ownership in such shares.
Certain accounts for which the Investment Manager acts as investment
adviser owned 2,484,603 shares in the aggregate, or 5.51% of the outstanding
shares of Scudder Income Fund on June 30, 1997. The Investment Manager may be
deemed to be a beneficial owner of such shares but disclaims any beneficial
ownership in such shares.
As of June 30, 1997, 3,214,626 shares in the aggregate, 7.13% of the
outstanding shares of Scudder Income Fund were held in the name of State Street
Bank & Trust Co., Custodian for the Scudder Pathway Series Balanced Portfolio,
One Heritage Drive, Quincy, MA 02171, who may be deemed to be the beneficial
owner of certain of these shares, but disclaims any beneficial ownership
therein.
Certain accounts for which the Investment Manager acts as investment
adviser owned 757,071 shares in the aggregate, or 9.45% of the outstanding
shares of Scudder High Yield Bond Fund on June 30, 1997. The Investment Manager
may be deemed to be a beneficial owner of such shares but disclaims any
beneficial ownership in such shares.
As of June 30, 1997, 964,491 shares in the aggregate, 12.04% of the
outstanding shares of Scudder High Yield Bond Fund were held in the name of
Charles Schwab & Co., Inc., 101 Montgomery Street, San Francisco, CA 94101, who
may be deemed to be the beneficial owner of certain of these shares, but
disclaims any beneficial ownership therein.
- 33 -
<PAGE>
As of June 30, 1997, 636,488 shares in the aggregate, 7.95% of the
outstanding shares of Scudder High Yield Bond Fund were held in the name of
State Street Bank & Trust Co., Custodian for the Scudder Pathway Series Balanced
Portfolio, One Heritage Drive, Quincy, MA 02171, who may be deemed to be the
beneficial owner of certain of these shares, but disclaims any beneficial
ownership therein.
As of June 30, 1997, 454,787 shares in the aggregate, 5.68% of the
outstanding shares of Scudder High Yield Bond Fund were held in the name of SSC
Investment Corporation, 345 Park Avenue, New York, NY 10154, who may be deemed
to be the beneficial owner of certain of these shares, but disclaims any
beneficial ownership therein.
To the best of each Trust's knowledge, as of June 30, 1997, no person owned
beneficially more than 5% of any Fund's outstanding shares, except as stated
above.
Responsibilities of the Board - Board and Committee Meetings
The Board of Trustees of each Trust is responsible for the general
oversight of Fund business. A majority of the Board's members are not affiliated
with Scudder. These Non-interested Trustees have primary responsibility for
assuring that the Fund is managed in the best interests of its shareholders.
Each Board of Trustees meets at least quarterly to review the investment
performance of the Funds and other operational matters, including policies and
procedures designated to assure compliance with various regulatory requirements.
At least annually, the Non-interested Trustees review the fees paid to the
Investment Manager and its affiliates for investment advisory services and other
administrative and shareholder services. In this regard, they evaluate, among
other things, each Fund's investment performance, the quality and efficiency of
the various other services provided, costs incurred by the Investment Manager
and its affiliates, and comparative information regarding fees and expenses of
competitive funds. They are assisted in this process by the Funds' independent
public accountants and by independent legal counsel selected by the
Non-interested Trustees. In addition, the Non-interested Trustees from time to
time have established and served on task forces and subcommittees focusing on
particular matters such as investment, accounting and shareholder service
issues.
The Board of each Trust has both an Audit Committee and a Committee on
Independent Trustees, the responsibilities of which are described below.
Audit Committee
The Board of each Trust has an Audit Committee consisting of the
Non-interested Trustees. The Audit Committee reviews with management and the
independent accountants for each Fund, among other things, the scope of the
audit and the controls of each Fund and its agents, reviews and approves in
advance the type of services to be rendered by independent accountants,
recommends the selection of independent accountants for each Fund to the Board
and, in general, considers and reports to the Board on matters regarding each
Fund's accounting and bookkeeping practices.
- 34 -
<PAGE>
Committee on Independent Trustees
The Board of each Trust has a Committee on Independent Trustees consisting
of all the Non-interested Trustees. The Committee is charged with the duty of
making all nominations for Non-interested Trustees and consideration of other
related matters. Shareholders' recommendations as to nominees received by
management are referred to the Committee for its consideration and action.
The following chart sets forth the number of meetings of the Board, the
Audit Committee and the Committee on Independent Trustees of each Trust during
the calendar year 1996.
NUMBER OF BOARD AND COMMITTEE MEETINGS HELD
DURING THE CALENDAR YEAR 1996
COMMITTEE ON
BOARD OF TRUSTEES AUDIT COMMITTEE INDEPENDENT
MEETINGS MEETINGS TRUSTEES
NAME OF TRUST MEETINGS
------------- ----------------- --------------- ------------
Scudder Cash Investment Trust 6 2 2
Scudder GNMA Fund 6 2 2
Scudder Investment Trust 6 2 2
Scudder Portfolio Trust 7 2 2
Scudder U.S. Treasury Money Fund 6 2 2
Executive Officers
In addition to Ms. Quirk and Messrs. Lee and Pierce, Trustees who are also
officers of the Trusts, the following persons are Executive Officers of the
Trusts:
<TABLE>
<CAPTION>
<S> <C> <C>
Present Office with the Trust; Trust (Year First Became
Name (Age) Principal Occupation or an Officer) (2)
Employment (1)
- - - - - - ---------- ------------------------------ ------------------------
Kelly D. Babson (38) Vice President (of each Fund Scudder Portfolio Trust (1996)
except Scudder High Yield Bond
Fund); Principal of Scudder,
Stevens & Clark, Inc.
Bruce F. Beaty (39) Vice President; Principal of Scudder Investment Trust (1995)
Scudder, Stevens & Clark, Inc.
William F. Gadsden (42) Vice President; Managing Director Scudder Investment Trust (1996)
of Scudder, Stevens & Clark, Inc.
</TABLE>
- 35 -
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Present Office with the Trust; Trust (Year First Became
Name (Age) Principal Occupation or an Officer) (2)
Employment (1)
- - - - - - ---------- ------------------------------ ------------------------
David H. Glen (40) Vice President; Managing Director Scudder GNMA Fund (1987)
of Scudder, Stevens & Clark, Inc.
Jerard K. Hartman (64) Vice President; Managing Director Scudder Cash Investment Trust (1991)
of Scudder, Stevens & Clark, Inc. Scudder GNMA Fund (1986)
Scudder Investment Trust (1986)
Scudder Portfolio Trust (1986)
Scudder U.S. Treasury Money Fund (1986)
Robert T. Hoffman (38) Vice President; Managing Director Scudder Investment Trust (1992)
of Scudder, Stevens & Clark, Inc.
William M. Hutchinson (49) Vice President; Principal of Scudder Portfolio Trust (1987)
Scudder, Stevens & Clark, Inc.
Thomas W. Joseph (58) Vice President; Principal of Scudder Cash Investment Trust (1986)
Scudder, Stevens & Clark, Inc. Scudder GNMA Fund (1986)
Scudder Investment Trust (1986)
Scudder Portfolio Trust (1986)
Scudder U.S. Treasury Money Fund (1986)
Valerie F. Malter (39) Vice President; Principal of Scudder Investment Trust (1995)
Scudder, Stevens & Clark, Inc. Scudder Portfolio Trust (1995)
Thomas F. McDonough (50) Vice President and Secretary (and Scudder Cash Investment Trust (1984)
Assistant Treasurer of Scudder Scudder GNMA Fund (1983)
GNMA Fund, Scudder Investment Scudder Investment Trust (1984)
Trust and Scudder Portfolio Scudder Portfolio Trust (1984)
Trust); Principal of Scudder, Scudder U.S. Treasury Money Fund (1984)
Stevens & Clark, Inc.
Pamela A. McGrath (43) Vice President and Treasurer; Scudder Cash Investment Trust (1990)
Managing Director of Scudder, Scudder GNMA Fund (1990)
Stevens & Clark, Inc. Scudder Investment Trust (1990)
Scudder Portfolio Trust (1990)
Scudder U.S. Treasury Money Fund (1991)
Edward J. O'Connell (52) Vice President and Assistant Scudder Cash Investment Trust (1990)
Treasurer; Principal of Scudder, Scudder GNMA Fund (1987)
Stevens & Clark, Inc. Scudder Investment Trust (1987)
Scudder Portfolio Trust (1990)
Scudder U.S. Treasury Money Fund (1991)
David Wines (41) Vice President; Principal of Scudder Cash Investment Trust (1996)
Scudder, Stevens & Clark, Inc. Scudder U.S. Treasury Money Fund (1996)
</TABLE>
- 36 -
<PAGE>
- - - - - - -------------------
(1) Unless otherwise stated, all of the Executive Officers have been associated
with their respective companies for more than five years, although not
necessarily in the same capacity.
(2) The President, Treasurer and Secretary each holds office until his or her
successor has been duly elected and qualified, and all other officers hold
offices in accordance with the By-laws of the Trust.
Compensation of Trustees and Officers
Effective July 1, 1997, the Trustees receive the following compensation
from the Funds: an annual Trustee's fee of $2,400 for Funds maintaining total
net assets which do not exceed $100 million, $4,800 for Funds maintaining total
net assets which exceed $100 million but do not exceed $1 billion, and $7,200
for Funds maintaining total net assets which exceed $1 billion; a fee of $200
for attendance at each Board meeting, audit committee meeting, or other meeting
held for the purposes of considering arrangements between the Fund and the
Investment Manager or any affiliate of the Investment Manager; $100 for any
other committee meeting (although in some cases the Non-interested Trustees have
waived committee meeting fees); and reimbursement of expenses incurred for
travel to and from Board Meetings. (Effective upon the election of Trustees at
the Special Meeting, such meeting fees will be reduced by 25% to $150 and $75,
respectively.) No additional compensation is paid to any Non-interested Trustee
for travel time to meetings, attendance at directors' educational seminars or
conferences, service on industry or association committees, participation as
speakers at directors' conferences, service on special Trustee task forces or
subcommittees or service as lead or liaison Trustee. Non-interested Trustees do
not receive any employee benefits such as pensions, retirement or health
insurance. The Non-interested Trustees also serve in the same capacity for other
funds managed by the Investment Manager. These funds differ broadly in type and
complexity and in some cases have substantially different Trustee fee schedules.
Scudder supervises each Fund's investments, pays the compensation and
certain expenses of its personnel who serve as Trustees and officers of each
Trust and receives a management fee for its services. Several of each Trust's
officers and Trustees are also officers, Directors, employees or shareholders of
Scudder and participate in the fees paid to that firm, although such Trust makes
no direct payments to them other than for reimbursement of travel expenses in
connection with their attendance at certain Trustees' and committee meetings.
The following Compensation Table provides in tabular form the following
data:
Column (1) All Trustees who receive compensation from each Trust.
Column (2) Aggregate compensation received by each Trustee of each Trust
during the calendar year 1996.
Column (3) Total compensation received by each Trustee from funds managed
by Scudder (collectively, the "Fund Complex") during the calendar year 1996.
- 37 -
<PAGE>
The Trustees do not receive any pension or retirement benefits from any
Trust.
COMPENSATION TABLE
<TABLE>
<CAPTION>
(1) (2) (3)
Aggregate Compensation
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Total
Scudder Compensation
Scudder U.S. From the
Cash Scudder GNMA Scudder Scudder Treasury Fund and Fund
Name of Investment Fund Investment Portfolio Money Fund Complex
Trustee Trust Trust Trust Paid to Trustee
- - - - - - ---------------------------- -------------- --------------- -------------- -------------- -------------- --------------------
Henry P. Becton, Jr. $8,900 -- $17,800 $20,712 -- $91,012
(16 Funds)
Dawn-Marie Driscoll $9,500 $9,500 -- -- $9,500 $103,000
(16 Funds)
Peter B. Freeman $9,500 -- -- -- -- $131,734
(33 Funds)
George M. Lovejoy, Jr. $9,500 $9,500 $19,300 $22,512 $9,500 $124,512
(13 Funds)
Dr. Wesley W. Marple, Jr. -- $9,500 $19,300 $22,512 -- $106,812
(16 Funds)
Jean C. Tempel -- $9,200 $18,400 $21,312 $9,200 $102,895
(16 Funds)
</TABLE>
Required Vote
Election of each of the listed nominees for Trustee requires the
affirmative vote of a plurality of the votes of each Trust cast at the Special
Meeting in person or by proxy. This means that the eight nominees receiving the
largest number of votes will be elected. The Trustees of each Trust recommend
that the shareholders of each Trust vote in favor of each of the nominees listed
in this Proposal 2.
PROPOSAL 3: APPROVAL OR DISAPPROVAL OF THE BOARD'S
DISCRETIONARY AUTHORITY TO CONVERT EACH FUND TO A
MASTER/FEEDER FUND STRUCTURE
If this Proposal 3 is approved by shareholders, the Board could determine
that the objectives of a Fund would be achieved more efficiently, while
retaining its current distribution arrangements, by investing in a master fund
in a master/feeder structure as described below, and in that case cause the Fund
to do so without further approval by shareholders.
A master/feeder fund structure is one in which a fund (a feeder fund),
instead of investing directly in a portfolio of securities, invests all of its
investment assets in another investment company (the master fund) with
substantially the same investment objectives and policies as the feeder fund.
Such a structure permits the pooling of assets of two or more feeder funds in
the master fund in an effort to achieve possible economies of scale and
efficiencies in portfolio management, while preserving separate identities,
- 38 -
<PAGE>
management and/or distribution channels at the feeder fund level. An existing
investment company could convert to a feeder fund by selling all of its
investments, which involves brokerage and other transaction costs and the
realization of taxable gain or loss, or by contributing its assets to the master
fund and avoiding transaction costs and the realization of taxable gain or loss.
Under each Trust's Declaration of Trust, the affirmative vote of a majority
of the shares of a Fund is required to sell or transfer substantially all of the
assets of the Fund. One way to convert a Fund to a master/feeder fund structure
is through a sale or transfer of assets. Thus, approval of the Board's
discretionary authority to convert a Fund to a master/feeder fund structure
through a sale or transfer of assets requires, under a conservative
interpretation of each Trust's Declaration of Trust, the affirmative vote of a
majority of the shares of the Fund.
A master fund must have the identical investment objective and
substantially the same investment policies as its feeder funds. This means that
the assets of the master fund are invested in the same types of securities in
which its feeder funds are authorized to invest.
Management of each Trust believes that, generally, the larger the pool of
assets being managed the more efficiently and cost-effectively it can be
managed. Because a master fund pools the assets of multiple feeder funds, it
provides an effective means of creating larger asset pools. Whether the Board
would exercise its discretionary authority to convert a Fund to a master/feeder
fund structure would depend upon the existence of appropriate opportunities to
pool the Fund's assets with those of other feeder funds. The primary motivation
for considering a master/feeder fund structure is to seek to achieve possible
economies of scale and efficiencies in portfolio management, while preserving
separate identities, management and/or distribution channels at the feeder
level. The Trustees' decision to convert a Fund would be based upon their
determination that it would be in the best interests of both the Fund and its
shareholders.
A feeder fund can withdraw its investment in a master fund at any time if
its board determines that it is in the best interests of the shareholders to do
so or if the investment policies or restrictions of the master fund were changed
so that they were inconsistent with the policies and restrictions of the feeder
fund. Upon any such withdrawal, the board of the fund would consider what action
might be taken, including the investment of all of the assets of the fund in
another pooled investment entity having substantially the same investment
objectives and policies as the fund or the investment of the fund's assets
directly in accordance with its investment objective and policies.
Required Vote
Shareholders of each Fund will vote separately with respect to this
Proposal 3. Approval of this Proposal 3 by a Fund requires the affirmative vote
of a majority of the shares of the Fund. The Trustees of each Trust recommends
that shareholders of each Fund vote in favor of the approval of this Proposal 3.
- 39 -
<PAGE>
PROPOSAL 4: APPROVAL OR DISAPPROVAL
OF AN AMENDED AND RESTATED DECLARATION
OF TRUST FOR EACH TRUST
Changes and regulatory developments in the investment company industry have
occurred since the current form of each Trust's Declaration of Trust was
adopted. Because consummation of the Transactions described in Proposal 1
requires the holding of this Special Meeting, the Trustees of each Trust have
determined to seek at the same time shareholder approval of an Amended and
Restated Declaration of Trust ("Restated Declaration") designed to reflect those
changes and developments. The Restated Declaration also includes other changes
of a minor or clarifying nature. The principal changes in the current
Declaration of Trust which would be effected by shareholder approval of the
Restated Declaration are described below. A copy of the Restated Declaration is
attached to the proxy statement as Exhibit C.
PROPOSAL 4(A): CHANGES TO EACH TRUST'S CURRENT DECLARATION
OF TRUST THAT REQUIRE A VOTE OF TWO-THIRDS OF SHARES OF THE TRUST
OUTSTANDING AND ENTITLED TO VOTE
Master/Feeder Structure. A new Section 2.2(i) would be added to give the
Trustees the express power to accomplish each Fund's objective by investing all
or a portion of its assets in another investment company in a "master/feeder"
structure, by transferring assets of the Fund to the other investment company or
otherwise, without further shareholder approval. This section of the Restated
Declaration would grant to the Trustees power which is similar to that included
in Proposal 3, but differs from it as described in the next paragraph.
A master/feeder structure is described in Proposal 3. Management of each
Trust believes the Trustees currently have the power to enter into a
master/feeder structure, although a conservative interpretation of the current
Declaration of Trust is that shareholder approval is required for the transfer
of substantially all of a Fund's assets to a master fund to accomplish that
objective. Such a vote is not required to sell all of the Fund's portfolio
securities and to purchase its interest in the master fund with the proceeds.
The express grant to the Trustees of the power in the Restated Declaration to
enter into a master/feeder structure would remove any doubt as to the Trustees'
power to transfer assets to a master fund without shareholder approval, and
differs from the approval of entry into a master/feeder structure sought in
Proposal 3 primarily in that a power contained in any Trust's Declaration of
Trust is effective in perpetuity unless the Declaration of Trust is amended or
terminated. Thus, if Proposal 3 is approved but if it were concluded in the
future that the approval had lapsed due to the passage of time, the power of the
Trustees to enter into a master/feeder structure would nevertheless continue
under proposed Section 2.2(i) of the Restated Declaration, if approved.
Shareholder Voting. Under the Restated Declaration, shareholders would
continue to have the same rights as they now have to elect and remove Trustees,
to further amend the Restated Declaration and to vote on certain other matters.
Section 5.9 would be amended to eliminate shareholder voting under the
Declaration with respect to investment advisory or management contracts and Rule
12b-1 plans; each of these matters must be voted on under provisions of the 1940
Act or the rules thereunder, and a separate requirement in the Trust's governing
instrument is unnecessary. The Restated Declaration would also eliminate
shareholder
- 40 -
<PAGE>
voting on a merger, consolidation, sale of assets or incorporation of the Trust.
Although the Trustees ordinarily would not expect to take such an action without
shareholder approval, there are situations, as with a very small, uneconomical
fund, a sufficient number of whose shareholders cannot be located, where Trustee
action alone would be in the best interest of shareholders.
Required Vote
Approval of this Proposal 4(A) with respect to each Trust requires the vote
of two-thirds of the shares of that Trust outstanding and entitled to vote. If
the shareholders of any Trust fail to approve this Proposal 4(A), neither the
Restated Declaration, if approved, nor that Trust's current Declaration of Trust
would be amended as described in this Proposal 4(A). The Trustees of each Trust
recommend that the shareholders of each Trust vote in favor of this Proposal
4(A).
PROPOSAL 4(B): CHANGES TO EACH TRUST'S CURRENT DECLARATION
OF TRUST THAT REQUIRE A MAJORITY VOTE
Redemption of Certain Shareholders' Interests. A new subparagraph (b) would
be added to Section 6.6 to give the Trustees the power to redeem a shareholder's
interest if the shareholder has previously been involved in fraudulent
securities transactions. The Trustees anticipate that this power would be
exercised only if they believed it was likely that the shareholder might
contemplate a fraudulent redemption or take other action to the detriment of
other shareholders.
All other minor and clarifying changes which would be effected by approval
of the Restated Declaration are included in this Proposal 4(B).
Required Vote
Approval of this Proposal 4(B) with respect to each Trust requires the
affirmative vote of a majority of the outstanding voting securities of that
Trust, as defined above. The Trustees of each Trust recommend that the
shareholders of each Trust vote in favor of this Proposal 4(B).
If this Proposal 4(B) is approved with respect to any Trust, the Restated
Declaration will be adopted for that Trust. The Restated Declaration (or the
current Declaration of Trust) of each Trust will include new Section 2.2(i) and
the amendments to Section 5.9 only if Proposal 4(A) is also adopted for that
Trust.
PROPOSAL 5: APPROVAL OR DISAPPROVAL OF THE
REVISION OF CERTAIN FUNDAMENTAL INVESTMENT POLICIES
The 1940 Act requires an investment company to have adopted certain
specified investment policies which can be changed only by a shareholder vote.
Those policies are often referred to as "fundamental" policies. In the past,
fundamental policies were adopted by the Trusts on behalf of their Funds, and in
some cases amended by vote of the shareholders of the affected Fund, in order to
reflect regulatory, business or industry conditions which were in effect at the
time the particular action was taken. Because of the opportunity afforded by
this Special Meeting, there has been a review of each Fund's fundamental
policies with the goal of simplifying,
- 41 -
<PAGE>
modernizing and making consistent as far as possible the fundamental policies of
all open-end investment companies managed by Scudder.
This Proposal seeks shareholder approval of changes which are intended to
accomplish that goal. The proposed changes to each Fund's fundamental policies
are discussed in detail below. Please refer to the proposed policies as set
forth in Exhibit D.
Each of the fundamental policies proposed for adoption with respect to each
Fund is in an area in which the 1940 Act requires that the Fund adopt a
fundamental policy. Except for the policy on borrowing as discussed below, none
of the proposed policies differs from the respective Fund's current comparable
policy in a substantive way, although the formulation of the policy may differ
from the current one in the interest of uniformity and simplicity. Each Fund's
policies with respect to diversification, the issuance of senior securities, and
the underwriting of securities issued by others differ from the current policies
of each Fund in that the requirements of the 1940 Act, which of course apply,
are not spelled out in detail.
Diversification
Each Fund is a "diversified" fund under the 1940 Act. Under its current
diversification policy, each Fund, with respect to 75% of the value of its total
assets, may not purchase more than 10% of the voting securities of any one
issuer or invest more than 5% of the value of its total assets in the securities
of any one issuer, with exceptions for U.S. Government securities and securities
of other investment companies. This restriction is substantially identical to
the definition of a diversified fund under the 1940 Act. The applicable policy
of Scudder Cash Investment Trust also expressly exempts from the limitations of
the policy cash and cash equivalents, which are also exempt from the 1940 Act
limitations, and further states that the amount of total assets that may be
invested in the securities of any one issuer will instead be limited by federal
restrictions applicable to money market funds. In light of the provisions of the
1940 Act concerning the requirements of maintaining diversified status as well
as the rules applicable to money market funds, the specific references to cash
and cash equivalents, and to money market fund regulations, do not, in the
opinion of management of the Trusts, affect the Funds' diversification policies
and, therefore, such references are unnecessary. Accordingly, the proposed
statement that each Fund has elected to be classified as a diversified Fund
represents no substantive change in the current diversification policy for any
of the Funds.
Borrowing
The current policy of each Fund prohibits borrowing money, except as a
temporary measure for extraordinary or emergency purposes and except in
connection with reverse repurchase agreements, provided that the Fund maintains
asset coverage of 300% for all borrowings. Under the proposed policy, each Fund
would not be limited to borrowing for temporary or emergency purposes; however,
if the Trustees determine with respect to any Fund to permit borrowing for other
purposes, which they currently do not intend to do, the applicable Fund's
disclosure documents would be amended to disclose that fact. Although the
Trustees do not currently intend to permit a Fund to borrow for investment
leverage purposes, such borrowings would increase the Fund's volatility and the
risk of loss in a declining market. Borrowings under reverse repurchase
agreements are now permitted, and would be permitted under the proposed policy.
- 42 -
<PAGE>
The 1940 Act requires borrowings to have 300% asset coverage, which requirement
would, therefore, remain unchanged under the proposed policy. Accordingly,
therefore, except as stated above, the borrowing policy of each Fund would not
be changed by adoption of the proposed policy.
Senior Securities
The current policy of each Fund prohibits the issuance of senior
securities, except in connection with permitted indebtedness and except in
connection with the issuance of separate classes or series of shares. The
current policy, therefore, specifically excepts from the prohibition on the
issuance of senior securities certain practices which, under the current
policies of the Commission or its staff, are not deemed to involve the issuance
of senior securities. Accordingly, management of each Trust believes that it is
not necessary to specify those exceptions in the Funds' fundamental policies
with regard to senior securities because they are permitted under the 1940 Act.
Concentration
Each Fund's current policy in effect prohibits the purchase of securities
if it would result in more than 25% of the market value of the Fund's total
assets being invested in securities of one or more issuers having their
principal business activities in the same industry. There are exceptions for
U.S. Government securities, and, in the case of Scudder Cash Investment Trust,
for certificates of deposit or bankers' acceptances. In some cases, what
constitutes an industry for the purposes of this restriction is included in the
policy itself. While the 1940 Act does not define what constitutes
"concentration" in an industry, the staff of the SEC takes the position that
investment of more than 25% of a fund's assets in an industry constitutes
concentration. If a fund concentrates in an industry, it must at all times have
more than 25% of its assets invested in that industry, and if its policy is not
to concentrate, as is the case with each of the Funds, it may not invest more
than 25% of its assets in the applicable industry, unless, in either case, the
fund discloses the specific conditions under which it will change from
concentrating to not concentrating or vice versa. A fund is permitted to adopt
reasonable definitions of what constitutes an industry, or it may use standard
classifications promulgated by the Commission, or some combination thereof.
Because a fund may create its own reasonable industry classifications,
management of each Trust believes that it is not necessary to include such
matters in the fundamental policy of a Fund, and that the adoption of the
proposed concentration policy would make no substantive change in the current
concentration policy of any Fund.
The proposed concentration policy of Scudder Cash Investment Trust reserves
freedom of action for that Fund to concentrate in instruments issued by domestic
banks, which provision is similar to but broader than the current provisions
referred to above with respect to certificates of deposit and bankers'
acceptances. The proposed policy is common among money market funds. No change
in the operations of Scudder Cash Investment Trust is anticipated if the
proposed policies are approved.
- 43 -
<PAGE>
Other Policies
Each of the other proposed fundamental policies is substantially identical
to the current comparable policy of each Fund.
Required Vote
Approval of the proposed fundamental policies with respect to any Fund
requires the affirmative vote of a majority of the outstanding voting
securities, as defined above, of that Fund. If the shareholders of any Fund fail
to approve the proposed fundamental policies, the current policies will remain
in effect. The Trustees of each Trust recommend that the shareholders of each
Fund vote in favor of this Proposal 5.
PROPOSAL 6: RATIFICATION OR REJECTION
OF THE SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Trustees of each of the Trusts, including a majority of the
Non-interested Trustees, has selected Coopers & Lybrand L.L.P. to act as
independent accountants for each of the Funds for each Fund's current fiscal
year. Coopers & Lybrand L.L.P. are independent accountants and have advised the
Funds that they have no direct financial interest or material indirect financial
interest in the Funds. One or more representatives of Coopers & Lybrand L.L.P.
are expected to be present at the Special Meeting and will have an opportunity
to make a statement if they so desire. Such representatives are expected to be
available to respond to appropriate questions posed by shareholders or
management.
Required Vote
Ratification of the selection of independent accountants requires the
affirmative vote of a majority of the votes cast at the Special Meeting in
person or by proxy. The Trustees of each Trust recommend that the shareholders
of each Fund vote in favor of this Proposal 6.
ADDITIONAL INFORMATION
General
The cost of preparing, printing and mailing the enclosed proxy and proxy
statement and all other costs incurred in connection with the solicitation of
proxies, including any additional solicitation made by letter, telephone or
telegraph, will be paid by Scudder. In addition to solicitation by mail, certain
officers and representatives of each Trust, officers and employees of Scudder
and certain financial services firms and their representatives, who will receive
no extra compensation for their services, may solicit proxies by telephone,
telegram or personally.
Shareholder Communications Corporation ("SCC") has been engaged to assist
in the solicitation of proxies. As the Special Meeting date approaches, certain
shareholders of each Fund may receive a telephone call from a representative of
SCC if their vote has not yet been received. Authorization to permit SCC to
execute proxies may be obtained by telephonic or electronically transmitted
instructions from shareholders of each Fund. Proxies that are obtained
telephonically will be recorded in accordance with the procedures set forth
below. The Trustees
- 44 -
<PAGE>
believe that these procedures are reasonably designed to ensure that the
identity of the shareholder casting the vote is accurately determined and that
the voting instructions of the shareholder are accurately determined.
In all cases where a telephonic proxy is solicited, the SCC representative
is required to ask for each shareholder's full name, address, social security or
employer identification number, title (if the shareholder is authorized to act
on behalf of an entity, such as a corporation), and the number of shares owned,
and to confirm that the shareholder has received the proxy statement card in the
mail. If the information solicited agrees with the information provided to SCC,
then the SCC representative has the responsibility to explain the process, read
the proposals listed on the proxy card, and ask for the shareholder's
instructions on each proposal. The SCC representative, although he or she is
permitted to answer questions about the process, is not permitted to recommend
to the shareholder how to vote, other than to read any recommendation set forth
in the proxy statement. SCC will record the shareholder's instructions on the
card. Within 72 hours, the shareholder will be sent a letter or mailgram to
confirm his or her vote and asking the shareholder to call SCC immediately if
his or her instructions are not correctly reflected in the confirmation.
If the shareholder wishes to participate in the Special Meeting, but does
not wish to give his or her proxy by telephone, the shareholder may still submit
the proxy card originally sent with the proxy statement or attend in person.
Should shareholders require additional information regarding the proxy or
replacement proxy cards, they may contact SCC toll-free at 1-800-733-8481. Any
proxy given by a shareholder, whether in writing or by telephone, is revocable.
Proposals of Shareholders
Shareholders wishing to submit proposals for inclusion in a proxy statement
for a shareholder meeting subsequent to the Special Meeting, if any, should send
their written proposals to the Secretary of the Trust, c/o Scudder, Stevens &
Clark, Inc., Two International Place, Boston, Massachusetts 02110, within a
reasonable time before the solicitation of proxies for such meeting. The timely
submission of a proposal does not guarantee its inclusion.
Other Matters to Come Before the Special Meeting
No Board of Trustees is aware of any matters that will be presented for
action at the Special Meeting other than the matters set forth herein. Should
any other matters requiring a vote of shareholders arise, the proxy in the
accompanying form will confer upon the person or persons entitled to vote the
shares represented by such proxy the discretionary authority to vote the shares
as to any such other matters in accordance with their best judgment in the
interest of each Trust and/or Fund.
- 45 -
<PAGE>
PLEASE COMPLETE, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY. NO POSTAGE IS
REQUIRED IF MAILED IN THE UNITED STATES.
By order of the Board of Trustees,
Thomas F. McDonough
Secretary
- 46 -
<PAGE>
Exhibit A
----------
Name of Fund
Two International Place
Boston, Massachusetts 02110
_______________, 199__
Scudder Kemper Investments, Inc.
345 Park Avenue
New York, New York 10154
Investment Management Agreement
[Name of Series]
Ladies and Gentlemen:
[Name of Trust] (the "Trust") has been established as a Massachusetts
business Trust to engage in the business of an investment company. Pursuant to
the Trust's Declaration of Trust, as amended from time-to-time (the
"Declaration"), the Board of Trustees has divided the Trust's shares of
beneficial interest, par value $__ per share, (the "Shares") into separate
series, or funds, including [name of series] (the "Fund"). Series may be
abolished and dissolved, and additional series established, from time to time by
action of the Trustees.
The Trust, on behalf of the Fund, has selected you to act as the sole
investment manager of the Fund and to provide certain other services, as more
fully set forth below, and you have indicated that you are willing to act as
such investment manager and to perform such services under the terms and
conditions hereinafter set forth. Accordingly, the Trust on behalf of the Fund
agrees with you as follows:
1. Delivery of Documents. The Trust engages in the business of investing
and reinvesting the assets of the Fund in the manner and in accordance with the
investment objectives, policies and restrictions specified in the currently
effective Prospectus (the "Prospectus") and Statement of Additional Information
(the "SAI") relating to the Fund included in the Trust's Registration Statement
on Form N-1A, as amended from time to time, (the "Registration Statement") filed
by the Trust under the Investment Company Act of 1940, as amended, (the "1940
Act") and the Securities Act of 1933, as amended. Copies of the documents
referred to in the preceding sentence have been furnished to you by the Trust.
The Trust has also furnished you with copies properly certified or authenticated
of each of the following additional documents related to the Trust and the Fund:
(a) The Declaration dated __________, 19__, as amended to date.
(b) By-Laws of the Trust as in effect on the date hereof (the "By-Laws").
<PAGE>
(c) Resolutions of the Trustees of the Trust and the shareholders of the Fund
selecting you as investment manager and approving the form of this
Agreement.
(d) Establishment and Designation of Series of Shares of Beneficial Interest
dated __________, 19__ relating to the Fund.
The Trust will furnish you from time to time with copies, properly
certified or authenticated, of all amendments of or supplements, if any, to the
foregoing, including the Prospectus, the SAI and the Registration Statement.
2. Sublicense to Use the Scudder Trademarks. As exclusive licensee of the
rights to use and sublicense the use of the "Scudder" and ["Scudder Kemper
Investments, Inc."/"Scudder, Stevens & Clark, Inc."] trademarks (together, the
"Scudder Marks"), you hereby grant the Trust a nonexclusive right and sublicense
to use (i) the "Scudder" name and mark as part of the Trust's name (the "Fund
Name"), and (ii) the Scudder Marks in connection with the Trust's investment
products and services, in each case only for so long as this Agreement, any
other investment management agreement between you and the Trust, or any
extension, renewal or amendment hereof or thereof remains in effect, and only
for so long as you are a licensee of the Scudder Marks, provided however, that
you agree to use your best efforts to maintain your license to use and
sublicense the Scudder Marks. The Trust agrees that it shall have no right to
sublicense or assign rights to use the Scudder Marks, shall acquire no interest
in the Scudder Marks other than the rights granted herein, that all of the
Trust's uses of the Scudder Marks shall inure to the benefit of Scudder Trust
Company as owner and licensor of the Scudder Marks (the "Trademark Owner"), and
that the Trust shall not challenge the validity of the Scudder Marks or the
Trademark Owner's ownership thereof. The Trust further agrees that all services
and products it offers in connection with the Scudder Marks shall meet
commercially reasonable standards of quality, as may be determined by you or the
Trademark Owner from time to time, provided that you acknowledge that the
services and products the Trust rendered during the one-year period preceding
the date of this Agreement are acceptable. At your reasonable request, the Trust
shall cooperate with you and the Trademark Owner and shall execute and deliver
any and all documents necessary to maintain and protect (including but not
limited to in connection with any trademark infringement action) the Scudder
Marks and/or enter the Trust as a registered user thereof. At such time as this
Agreement or any other investment management agreement shall no longer be in
effect between you (or your successor) and the Trust, or you no longer are a
licensee of the Scudder Marks, the Trust shall (to the extent that, and as soon
as, it lawfully can) cease to use the Fund Name or any other name indicating
that it is advised by, managed by or otherwise connected with you (or any
organization which shall have succeeded to your business as investment manager)
or the Trademark Owner. In no event shall the Trust use the Scudder Marks or any
other name or mark confusingly similar thereto (including, but not limited to,
any name or mark that includes the name "Scudder") if this Agreement or any
other investment advisory agreement between you (or your successor) and the Fund
is terminated.
2
<PAGE>
3. Portfolio Management Services. As manager of the assets of the Fund, you
shall provide continuing investment management of the assets of the Fund in
accordance with the investment objectives, policies and restrictions set forth
in the Prospectus and SAI; the applicable provisions of the 1940 Act and the
Internal Revenue Code of 1986, as amended, (the "Code") relating to regulated
investment companies and all rules and regulations thereunder; and all other
applicable federal and state laws and regulations of which you have knowledge;
subject always to policies and instructions adopted by the Trust's Board of
Trustees. In connection therewith, you shall use reasonable efforts to manage
the Fund so that it will qualify as a regulated investment company under
Subchapter M of the Code and regulations issued thereunder. The Fund shall have
the benefit of the investment analysis and research, the review of current
economic conditions and trends and the consideration of long-range investment
policy generally available to your investment advisory clients. In managing the
Fund in accordance with the requirements set forth in this section 3, you shall
be entitled to receive and act upon advice of counsel to the Trust or counsel to
you. You shall also make available to the Trust promptly upon request all of the
Fund's investment records and ledgers as are necessary to assist the Trust in
complying with the requirements of the 1940 Act and other applicable laws. To
the extent required by law, you shall furnish to regulatory authorities having
the requisite authority any information or reports in connection with the
services provided pursuant to this Agreement which may be requested in order to
ascertain whether the operations of the Trust are being conducted in a manner
consistent with applicable laws and regulations.
You shall determine the securities, instruments, investments, currencies,
repurchase agreements, futures, options and other contracts relating to
investments to be purchased, sold or entered into by the Fund and place orders
with broker-dealers, foreign currency dealers, futures commission merchants or
others pursuant to your determinations and all in accordance with Fund policies
as expressed in the Registration Statement. You shall determine what portion of
the Fund's portfolio shall be invested in securities and other assets and what
portion, if any, should be held uninvested.
You shall furnish to the Trust's Board of Trustees periodic reports on the
investment performance of the Fund and on the performance of your obligations
pursuant to this Agreement, and you shall supply such additional reports and
information as the Trust's officers or Board of Trustees shall reasonably
request.
4. Administrative Services. In addition to the portfolio management
services specified above in section 3, you shall furnish at your expense for the
use of the Fund such office space and facilities in the United States as the
Fund may require for its reasonable needs, and you (or one or more of your
affiliates designated by you) shall render to the Trust administrative services
on behalf of the Fund necessary for operating as an open-end investment company
and not provided by persons not parties to this Agreement including, but not
limited to, preparing reports to and meeting materials for the Trust's Board of
Trustees and reports and notices to Fund shareholders; supervising, negotiating
contractual arrangements with, to the extent appropriate, and monitoring the
performance of, accounting agents, custodians, depositories, transfer agents and
pricing agents, accountants, attorneys, printers, underwriters, brokers and
dealers, insurers and other persons in any capacity deemed to be necessary or
desirable to Fund operations;
3
<PAGE>
preparing and making filings with the Securities and Exchange Commission (the
"SEC") and other regulatory and self-regulatory organizations, including, but
not limited to, preliminary and definitive proxy materials, post-effective
amendments to the Registration Statement, semi-annual reports on Form N-SAR and
notices pursuant to Rule 24f-2 under the 1940 Act; overseeing the tabulation of
proxies by the Fund's transfer agent; assisting in the preparation and filing of
the Fund's federal, state and local tax returns; preparing and filing the Fund's
federal excise tax return pursuant to Section 4982 of the Code; providing
assistance with investor and public relations matters; monitoring the valuation
of portfolio securities and the calculation of net asset value; monitoring the
registration of Shares of the Fund under applicable federal and state securities
laws; maintaining or causing to be maintained for the Fund all books, records
and reports and any other information required under the 1940 Act, to the extent
that such books, records and reports and other information are not maintained by
the Fund's custodian or other agents of the Fund; assisting in establishing the
accounting policies of the Fund; assisting in the resolution of accounting
issues that may arise with respect to the Fund's operations and consulting with
the Fund's independent accountants, legal counsel and the Fund's other agents as
necessary in connection therewith; establishing and monitoring the Fund's
operating expense budgets; reviewing the Fund's bills; processing the payment of
bills that have been approved by an authorized person; assisting the Fund in
determining the amount of dividends and distributions available to be paid by
the Fund to its shareholders, preparing and arranging for the printing of
dividend notices to shareholders, and providing the transfer and dividend paying
agent, the custodian, and the accounting agent with such information as is
required for such parties to effect the payment of dividends and distributions;
and otherwise assisting the Trust as it may reasonably request in the conduct of
the Fund's business, subject to the direction and control of the Trust's Board
of Trustees. Nothing in this Agreement shall be deemed to shift to you or to
diminish the obligations of any agent of the Fund or any other person not a
party to this Agreement which is obligated to provide services to the Fund.
5. Allocation of Charges and Expenses. Except as otherwise specifically
provided in this section 5, you shall pay the compensation and expenses of all
Trustees, officers and executive employees of the Trust (including the Fund's
share of payroll taxes) who are affiliated persons of you, and you shall make
available, without expense to the Fund, the services of such of your directors,
officers and employees as may duly be elected officers of the Trust, subject to
their individual consent to serve and to any limitations imposed by law. You
shall provide at your expense the portfolio management services described in
section 3 hereof and the administrative services described in section 4 hereof.
You shall not be required to pay any expenses of the Fund other than those
specifically allocated to you in this section 5. In particular, but without
limiting the generality of the foregoing, you shall not be responsible, except
to the extent of the reasonable compensation of such of the Fund's Trustees and
officers as are directors, officers or employees of you whose services may be
involved, for the following expenses of the Fund: organization expenses of the
Fund (including out-of-pocket expenses, but not including your overhead or
employee costs); fees payable to you and to any other Fund advisors or
consultants; legal expenses; auditing and accounting expenses; maintenance of
books and records which are required to be maintained by the Fund's custodian or
other agents of the Trust; telephone, telex, facsimile, postage and other
4
<PAGE>
communications expenses; taxes and governmental fees; fees, dues and expenses
incurred by the Fund in connection with membership in investment company trade
organizations; fees and expenses of the Fund's accounting agent, custodians,
subcustodians, transfer agents, dividend disbursing agents and registrars;
payment for portfolio pricing or valuation services to pricing agents,
accountants, bankers and other specialists, if any; expenses of preparing share
certificates and, except as provided below in this section 5, other expenses in
connection with the issuance, offering, distribution, sale, redemption or
repurchase of securities issued by the Fund; expenses relating to investor and
public relations; expenses and fees of registering or qualifying Shares of the
Fund for sale; interest charges, bond premiums and other insurance expense;
freight, insurance and other charges in connection with the shipment of the
Fund's portfolio securities; the compensation and all expenses (specifically
including travel expenses relating to Trust business) of Trustees, officers and
employees of the Trust who are not affiliated persons of you; brokerage
commissions or other costs of acquiring or disposing of any portfolio securities
of the Fund; expenses of printing and distributing reports, notices and
dividends to shareholders; expenses of printing and mailing Prospectuses and
SAIs of the Fund and supplements thereto; costs of stationery; any litigation
expenses; indemnification of Trustees and officers of the Trust; costs of
shareholders' and other meetings; and travel expenses (or an appropriate portion
thereof) of Trustees and officers of the Trust who are directors, officers or
employees of you to the extent that such expenses relate to attendance at
meetings of the Board of Trustees of the Trust or any committees thereof or
advisors thereto held outside of Boston, Massachusetts or New York, New York.
You shall not be required to pay expenses of any activity which is
primarily intended to result in sales of Shares of the Fund if and to the extent
that (i) such expenses are required to be borne by a principal underwriter which
acts as the distributor of the Fund's Shares pursuant to an underwriting
agreement which provides that the underwriter shall assume some or all of such
expenses, or (ii) the Trust on behalf of the Fund shall have adopted a plan in
conformity with Rule 12b-1 under the 1940 Act providing that the Fund (or some
other party) shall assume some or all of such expenses. You shall be required to
pay such of the foregoing sales expenses as are not required to be paid by the
principal underwriter pursuant to the underwriting agreement or are not
permitted to be paid by the Fund (or some other party) pursuant to such a plan.
6. Management Fee. For all services to be rendered, payments to be made and
costs to be assumed by you as provided in sections 3, 4 and 5 hereof, the Trust
on behalf of the Fund shall pay you in United States Dollars on the last day of
each month the unpaid balance of a fee equal to the excess of (a) 1/12 of ____
of 1 percent of the average daily net assets as defined below of the Fund for
such month; [provided that, for any calendar month during which the average of
such values exceeds $________, the fee payable for that month based on the
portion of the average of such values in excess of $________ shall be 1/12 of __
of 1 percent of such portion;] [and provided that, for any calendar month during
which the average of such values exceeds $________, the fee payable for that
month based on the portion of the average of such values in excess of $________
shall be 1/12 of ____ of 1 percent of such portion;] over any compensation
waived by you from time to time (as more fully described below). You shall be
entitled to receive during any month such interim payments of your fee hereunder
as you shall
5
<PAGE>
request, provided that no such payment shall exceed 75 percent of the amount of
your fee then accrued on the books of the Fund and unpaid.
The "average daily net assets" of the Fund shall mean the average of the
values placed on the Fund's net assets as of 4:00 p.m. (New York time) on each
day on which the net asset value of the Fund is determined consistent with the
provisions of Rule 22c-1 under the 1940 Act or, if the Fund lawfully determines
the value of its net assets as of some other time on each business day, as of
such time. The value of the net assets of the Fund shall always be determined
pursuant to the applicable provisions of the Declaration and the Registration
Statement. If the determination of net asset value does not take place for any
particular day, then for the purposes of this section 6, the value of the net
assets of the Fund as last determined shall be deemed to be the value of its net
assets as of 4:00 p.m. (New York time), or as of such other time as the value of
the net assets of the Fund's portfolio may be lawfully determined on that day.
If the Fund determines the value of the net assets of its portfolio more than
once on any day, then the last such determination thereof on that day shall be
deemed to be the sole determination thereof on that day for the purposes of this
section 6.
You may waive all or a portion of your fees provided for hereunder and such
waiver shall be treated as a reduction in purchase price of your services. You
shall be contractually bound hereunder by the terms of any publicly announced
waiver of your fee, or any limitation of the Fund's expenses, as if such waiver
or limitation were fully set forth herein.
7. Avoidance of Inconsistent Position; Services Not Exclusive. In
connection with purchases or sales of portfolio securities and other investments
for the account of the Fund, neither you nor any of your directors, officers or
employees shall act as a principal or agent or receive any commission. You or
your agent shall arrange for the placing of all orders for the purchase and sale
of portfolio securities and other investments for the Fund's account with
brokers or dealers selected by you in accordance with Fund policies as expressed
in the Registration Statement. If any occasion should arise in which you give
any advice to clients of yours concerning the Shares of the Fund, you shall act
solely as investment counsel for such clients and not in any way on behalf of
the Fund.
Your services to the Fund pursuant to this Agreement are not to be deemed
to be exclusive and it is understood that you may render investment advice,
management and services to others. In acting under this Agreement, you shall be
an independent contractor and not an agent of the Trust. Whenever the Fund and
one or more other accounts or investment companies advised by the Manager have
available funds for investment, investments suitable and appropriate for each
shall be allocated in accordance with procedures believed by the Manager to be
equitable to each entity. Similarly, opportunities to sell securities shall be
allocated in a manner believed by the Manager to be equitable. The Fund
recognizes that in some cases this procedure may adversely affect the size of
the position that may be acquired or disposed of for the Fund.
6
<PAGE>
8. Limitation of Liability of Manager. As an inducement to your undertaking
to render services pursuant to this Agreement, the Trust agrees that you shall
not be liable under this Agreement for any error of judgment or mistake of law
or for any loss suffered by the Fund in connection with the matters to which
this Agreement relates, provided that nothing in this Agreement shall be deemed
to protect or purport to protect you against any liability to the Trust, the
Fund or its shareholders to which you would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of your
duties, or by reason of your reckless disregard of your obligations and duties
hereunder. Any person, even though also employed by you, who may be or become an
employee of and paid by the Fund shall be deemed, when acting within the scope
of his or her employment by the Fund, to be acting in such employment solely for
the Fund and not as your employee or agent.
9. Duration and Termination of This Agreement. This Agreement shall remain
in force until September 30, 19__, and continue in force from year to year
thereafter, but only so long as such continuance is specifically approved at
least annually (a) by the vote of a majority of the Trustees who are not parties
to this Agreement or interested persons of any party to this Agreement, cast in
person at a meeting called for the purpose of voting on such approval, and (b)
by the Trustees of the Trust, or by the vote of a majority of the outstanding
voting securities of the Fund. The aforesaid requirement that continuance of
this Agreement be "specifically approved at least annually" shall be construed
in a manner consistent with the 1940 Act and the rules and regulations
thereunder and any applicable SEC exemptive order therefrom.
This Agreement may be terminated with respect to the Fund at any time,
without the payment of any penalty, by the vote of a majority of the outstanding
voting securities of the Fund or by the Trust's Board of Trustees on 60 days'
written notice to you, or by you on 60 days' written notice to the Trust. This
Agreement shall terminate automatically in the event of its assignment.
10. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against whom enforcement of the change, waiver,
discharge or termination is sought, and no amendment of this Agreement shall be
effective until approved in a manner consistent with the 1940 Act and rules and
regulations thereunder and any applicable SEC exemptive order therefrom.
11. Limitation of Liability for Claims. The Declaration, a copy of which,
together with all amendments thereto, is on file in the Office of the Secretary
of the Commonwealth of Massachusetts, provides that the name "Scudder _______
Trust" refers to the Trustees under the Declaration collectively as Trustees and
not as individuals or personally, and that no shareholder of the Fund, or
Trustee, officer, employee or agent of the Trust, shall be subject to claims
against or obligations of the Trust or of the Fund to any extent whatsoever, but
that the Trust estate only shall be liable.
7
<PAGE>
You are hereby expressly put on notice of the limitation of liability as
set forth in the Declaration and you agree that the obligations assumed by the
Trust on behalf of the Fund pursuant to this Agreement shall be limited in all
cases to the Fund and its assets, and you shall not seek satisfaction of any
such obligation from the shareholders or any shareholder of the Fund or any
other series of the Trust, or from any Trustee, officer, employee or agent of
the Trust. You understand that the rights and obligations of each Fund, or
series, under the Declaration are separate and distinct from those of any and
all other series.
12. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
In interpreting the provisions of this Agreement, the definitions contained
in Section 2(a) of the 1940 Act (particularly the definitions of "affiliated
person," "assignment" and "majority of the outstanding voting securities"), as
from time to time amended, shall be applied, subject, however, to such
exemptions as may be granted by the SEC by any rule, regulation or order.
This Agreement shall be construed in accordance with the laws of the
Commonwealth of Massachusetts, provided that nothing herein shall be construed
in a manner inconsistent with the 1940 Act, or in a manner which would cause the
Fund to fail to comply with the requirements of Subchapter M of the Code.
This Agreement shall supersede all prior investment advisory or management
agreements entered into between you and the Trust on behalf of the Fund.
If you are in agreement with the foregoing, please execute the form of
acceptance on the accompanying counterpart of this letter and return such
counterpart to the Trust, whereupon this letter shall become a binding contract
effective as of the date of this Agreement.
Yours very truly,
[NAME OF TRUST],on behalf of
Scudder _______________ Fund
By: ______________________________
President
8
<PAGE>
The foregoing Agreement is hereby accepted as of the date hereof.
SCUDDER KEMPER INVESTMENTS, INC.
By: ______________________________
Managing Director
9
<PAGE>
Boston Taxable
DRAFT - 8/06/97
Exhibit B
---------
<TABLE>
<CAPTION>
EXHIBIT B
Investment Objectives and Advisory Fees
For Funds Advised by Scudder, Stevens & Clark, Inc.
FUND OBJECTIVE FEE RATE
---- --------- --------
<S> <C> <C>
Money Market
Scudder U.S. Treasury Money Fund Safety, liquidity, and stability of capital and, 0.500% of net assets
consistent therewith, current income.
Scudder Cash Investment Trust Stability of capital while maintaining liquidity 0.500% to $250 million
of capital and providing current income from 0.450% next $250 million
money market securities. 0.400% next $500 million
0.350% thereafter
Scudder Money Market Series High level of current income consistent with 0.250% of net assets
preservation of capital and liquidity by
investing in a broad range of short-term money
market instruments.
Scudder Government Money Market High level of current income consistent with 0.250% of net assets
Series preservation of capital and liquidity by
investing exclusively in obligations issued or
guaranteed by the U.S. Government or its agencies
or instrumentalities and in certain repurchase
agreements.
Tax Free Money Market
Scudder Tax Free Money Fund Income exempt from regular federal income taxes 0.500% to $500 million
and stability of principal through investments in 0.480% thereafter
municipal securities.
Scudder Tax Free Money Market High level of current income consistent with 0.250% of net assets
Series preservation of capital and liquidity exempt from
federal income tax by investing primarily in high
quality municipal obligations.
-1-
<PAGE>
FUND OBJECTIVE FEE RATE
---- --------- --------
Scudder California Tax Free Money Stability of capital and the maintenance of a 0.500% of net assets
Fund constant net asset value of $1.00 per share while
providing California tax payers income exempt
from both California personal and regular federal
income tax through investment in high quality,
short- term tax-exempt California municipal
securities.
Scudder New York Tax Free Money Stability of capital and income exempt from New 0.500% of net assets
Fund York state and New York City personal income
taxes and regular federal income tax through
investment in high quality, short-term municipal
securities in New York.
Tax Free
Scudder Limited Term Tax Free Fund High level of income exempt from regular federal 0.600% of net assets
income tax consistent with a high degree of
principal stability.
Scudder Medium Term Tax Free Fund High level of income exempt from regular federal 0.600% to $500 million
income tax and limited principal fluctuation 0.500% thereafter
through investment primarily in high grade
intermediate term municipal securities.
Scudder Managed Municipal Bonds Income exempt from regular federal income tax 0.550% to $200 million
primarily through investments in high-grade 0.500% next $500 million
long-term municipal securities. 0.475% thereafter
Scudder High Yield Tax Free Fund High level of income, exempt from regular federal 0.650% to $300 million
income tax, from an actively managed portfolio 0.600% thereafter
consisting primarily of investment grade
municipal securities.
Scudder California Tax Free Fund Income exempt from both California state personal 0.625% to $200 million
income tax and regular federal income tax 0.600% thereafter
primarily through investment grade municipal
securities.
Scudder Massachusetts Limited Term A high level of income exempt from both 0.600% of net assets
Tax Free Fund Massachusetts personal income tax and regular
federal income tax as is consistent with a high
degree of price stability.
-2-
<PAGE>
FUND OBJECTIVE FEE RATE
---- --------- --------
Scudder Massachusetts Tax Free A high level of income exempt from both 0.600% of net assets
Fund Massachusetts personal income tax and regular
federal income tax through investment primarily
in long-term investment-grade municipal
securities in Massachusetts.
Scudder New York Tax Free Fund Income exempt from New York state and New York 0.625% to $200 million
City personal income taxes and regular federal 0.600% thereafter
income tax through investment primarily in
long-term investment-grade municipal securities
in New York.
Scudder Ohio Tax Free Fund Income exempt from Ohio personal income tax and 0.600% of net assets
regular federal income tax through investment
primarily in investment-grade municipal
securities in Ohio.
Scudder Pennsylvania Tax Free Fund Income exempt from Pennsylvania personal income 0.600% of net assets
tax and regular federal income tax through
investment primarily in investment-grade
municipal securities in Pennsylvania.
U.S. Income
Scudder Short Term Bond Fund High level of income consistent with a high 0.600% to $500 million
degree of principal stability through investments 0.500% next $500 million
primarily in high quality short-term bonds. 0.450% next $500 million
0.400% next $500 million
0.375% next $1 billion
0.350% thereafter
Scudder Zero Coupon 2000 Fund High investment returns over a selected period as 0.600% of net assets
is consistent with investment in U.S. Government
securities and the minimization of reinvestment
risk.
Scudder GNMA Fund High current income and safety of principal 0.650% to $200 million
primarily from investment in U.S. Government 0.600% next $300 million
mortgage-backed GNMA securities. 0.550% thereafter
-3-
<PAGE>
FUND OBJECTIVE FEE RATE
---- --------- --------
Scudder Income Fund A high level of income, consistent with the 0.650% to $200 million
prudent investment of capital, through a flexible 0.600% next $300 million
investment program emphasizing high-grade bonds. 0.550% thereafter
Scudder High Yield Bond Fund A high level of current income and capital 0.700% of net assets
appreciation through investment primarily in
below investment-grade domestic debt securities.
Global Income
Scudder Global Bond Fund Total return with an emphasis on current income 0.750% to $1 billion
by investing primarily in high-grade bonds 0.700% thereafter
denominated in foreign currencies and the U.S.
dollar.
Scudder International Bond Fund Income primarily by investing in high-grade 0.850% to $1 billion
international bonds and protection and possible 0.800% thereafter
enhancement of principal value by actively
managing currency, bond market and maturity
exposure and by security selection
Scudder Emerging Markets Income High current income and, secondarily, long-term 1.000% of net assets
Fund capital appreciation by investing primarily in
high-yielding debt securities issued in emerging
markets.
Asset Allocation
Scudder Pathway Conservative Current income and, secondarily, long-term growth 0.000%
Portfolio of capital by investing substantially in bond
mutual funds, but will have some exposure to
equity mutual funds.
Scudder Pathway Balanced Portfolio Balance of growth and income by investing in a 0.000%
mix of money market, bond and equity mutual funds.
Scudder Pathway Growth Portfolio Long-term growth of capital by investing 0.000%
predominantly in equity mutual funds designed to
provide long-term growth.
-4-
<PAGE>
FUND OBJECTIVE FEE RATE
---- --------- --------
Scudder Pathway International Maximize total return by investing in a select 0.000%
Portfolio mix of established international and global
Scudder Funds.
U.S. Growth and Income
Scudder Balanced Fund A balance of growth and income from a diversified 0.700% of net assets
portfolio of equity and fixed income securities
and long-term preservation of capital through a
quality oriented investment approach designed to
reduce risk.
Scudder Growth and Income Fund Long-term growth of capital, current income and 0.600% to $500 million
growth of income primarily from common stocks, 0.550% next $500 million
preferred stocks and securities convertible into 0.500% next $500 million
common stocks. 0.475% next $500 million
0.450% next $1 billion
0.425% next $1 billion
0.405% thereafter
U.S. Growth
Scudder Large Company Value Fund Maximize long-term capital appreciation through a 0.750% to $500 million
(formerly Scudder Capital Growth value driven investment program emphasizing 0.650% next $500 million
Fund) common stocks and preferred stocks.
Scudder Value Fund Long-term growth of capital through investment in 0.700% of net assets
undervalued equity securities.
Scudder Small Company Value Fund Long-term growth of capital by investing 0.750% of net assets
primarily in undervalued equity securities of
small U.S. companies.
Scudder Micro Cap Fund Long-term growth of capital by investing 0.750% of net assets
primarily in a diversified portfolio of U.S.
micro-cap common stocks.
Scudder Classic Growth Fund Long-term growth of capital while keeping the 0.700% of net assets
value of its shares more stable than other growth
mutual funds.
-5-
<PAGE>
FUND OBJECTIVE FEE RATE
---- --------- --------
Scudder Large Company Growth Fund Long-term growth of capital through investment 0.700% of net assets
(formerly Scudder Quality Growth primarily in the equity securities of seasoned,
Fund) financially strong U.S. growth companies.
Scudder Development Fund Long-term growth of capital by investing 1.000% to $500 million
primarily in equity securities of emerging growth 0.950% next $500 million
companies. 0.900% thereafter
Scudder 21st Century Growth Fund Long-term growth of capital by investing 1.000% of net assets
primarily in the securities of emerging growth
companies poised to be leaders in the 21st
century.
Global Growth
Scudder Global Fund Long-term growth of capital through investment in Effective 9/11/97
a diversified portfolio of marketable foreign and 1.000% to $500 million
domestic securities, primarily equity securities. 0.950% next $500 million
0.900% next $500 million
0.850% thereafter
Institutional International Equity Long-term growth of capital primarily through a 0.900% of net assets
Portfolio diversified portfolio of marketable foreign
equity securities.
Scudder International Growth and Long-term growth of capital and current income 1.000% of net assets
Income Fund primarily from foreign equity securities
Scudder International Fund Long-term growth of capital primarily through a 0.900% to $500 million
diversified portfolio of marketable foreign 0.850% next $500 million
equity securities. 0.800% next $1 billion
0.750% next $1 billion
0.700% thereafter
Scudder Global Discovery Fund Above-average capital appreciation over the 1.100% of net assets
long-term by investing primarily in the equity
securities of small companies located throughout
the world.
-6-
<PAGE>
FUND OBJECTIVE FEE RATE
---- --------- --------
Scudder Emerging Markets Growth Long-term growth of capital primarily through 1.25% of net assets
Fund equity investments in emerging markets around the
globe.
Scudder Gold Fund Maximum return consistent with investing in a 1.000% of net assets
portfolio of gold-related equity securities and
gold.
Scudder Greater Europe Growth Fund Long-term growth of capital through investment 1.000% of net assets
primarily in the equity securities of European
companies.
Scudder Pacific Opportunities Fund Long-term growth of capital primarily through 1.100% of net assets
investment in the equity securities of Pacific
Basin companies, excluding Japan.
Scudder Latin America Fund Long-term capital appreciation through investment Effective 9/11/97:
primarily in the securities of Latin American 1.250% to $1 billion
issuers. 1.150% thereafter
The Japan Fund, Inc. Long-term capital appreciation through investment 0.850% to $100 million
primarily in equity securities of Japanese 0.750% next $200 million
companies. 0.700% next $300 million
0.650% thereafter
Closed-End Funds
The Argentina Fund, Inc. Long-term capital appreciation through investment Advisor:
primarily in equity securities of Argentine Effective 11/1/97
issuers. 1.100% of net assets
Sub-Advisor:
Paid by Advisor.
0.160% of net assets
-7-
<PAGE>
FUND OBJECTIVE FEE RATE
---- --------- --------
The Brazil Fund, Inc. Long-term capital appreciation through investment 1.200% to $150 million
primarily in equity securities of Brazilian 1.050% next $150 million
issuers. 1.000% thereafter
Effectove 10/29/97:
1.200% to $150 million
1.050% next $150 million
1.000% next $200 million
0.900% thereafter
Administrator:
Receives an annual fee of
$50,000
The Korea Fund, Inc. Long-term capital appreciation through investment Advisor:
primarily in equity securities of Korean issuers. 1.150% to $50 million
1.100% next $50 million
1.000% next $250 million
0.950% next $400 million
0.900% thereafter
Sub-Advisor-Daewoo:
Paid by Advisor.
0.2875% to $50 million
0.275% next $50 million
0.250% next $250 million
0.2375% next $400 million
0.225% thereafter
The Latin America Dollar Income High level of current income and, secondarily, 1.200% of net assets
Fund, Inc. capital appreciation through investment
principally in dollar-denominated Latin American
debt instruments.
-8-
<PAGE>
FUND OBJECTIVE FEE RATE
---- --------- --------
Montgomery Street Income High level of current income consistent with 0.500% to $150 million
Securities, Inc. prudent investment risks through a diversified 0.450% next $50 million
portfolio primarily of debt securities. 0.400% thereafter
Scudder New Asia Fund, Inc. Long-term capital appreciation through investment 1.250% to $75 million
primarily in equity securities of Asian companies. 1.150% next $125 million
1.100% thereafter
Scudder New Europe Fund, Inc. Long-term capital appreciation through investment 1.250% to $75 million
primarily in equity securities of companies 1.150% next $125 million
traded on smaller or emerging European markets 1.100% thereafter
and companies that are viewed as likely to
benefit from changes and developments throughout
Europe.
Scudder Spain and Portugal Fund, Long-term capital appreciation through investment Advisor:
Inc. primarily in equity securities of Spanish & 1.000% of net assets
Portuguese issuers Administrator:
0.200% of net assets
Scudder World Income Opportunities High income and, consistent therewith, capital 1.200% of net assets
Fund, Inc. appreciation.
Insurance Products
Balanced Portfolio Balance of growth and income consistent with 0.475% of net assets
long-term preservation of capital through a
diversified portfolio of equity and fixed income
securities.
Bond Portfolio High level of income consistent with a high 0.475% of net assets
quality portfolio of debt securities.
Capital Growth Portfolio Long-term capital growth from a portfolio 0.475% to $500 million
consisting primarily of equity securities. 0.450% thereafter
-9-
<PAGE>
FUND OBJECTIVE FEE RATE
---- --------- --------
Global Discovery Portfolio Above-average capital appreciation over the 0.975% of net assets
long-term by investing primarily in the equity
securities of small companies located throughout
the world.
Growth and Income Portfolio Long-term growth of capital, current income and 0.475% of net assets
growth of income.
International Portfolio Long-term growth of capital primarily through 0.875% to $500 million
diversified holdings of marketable foreign equity 0.775% thereafter
investments.
Money Market Portfolio Stability of capital and, consistent therewith, 0.370% of net assets
liquidity of capital and current income.
AARP Funds
AARP High Quality Money Fund Current income and liquidity, consistent with Fee Rate Program
maintaining stability and safety of principal, Assets
through investment in high quality securities. 0.350% to $2 billion
0.330% next $2 billion
0.300% next $2 billion
0.280% next $2 billion
0.260% next $3 billion
0.250% next $3 billion
0.240% thereafter
Individual Fund Fee
0.100% of net assets
-10-
<PAGE>
FUND OBJECTIVE FEE RATE
---- --------- --------
AARP Balanced Stock and Bond Fund Long-term growth of capital and income, Fee Rate Program
consistent with a stable share price, through Assets
investment in a combination of stocks, bonds and 0.350% to $2 billion
cash reserves. 0.330% next $2 billion
0.300% next $2 billion
0.280% next $2 billion
0.260% next $3 billion
0.250% next $3 billion
0.240% thereafter
Individual Fund Fee
0.190% of net assets
AARP Capital Growth Fund Long-term capital growth, consistent with a Fee Rate Program
stable share price, through investment primarily Assets
in common stocks and securities convertible into 0.350% to $2 billion
common stocks. 0.330% next $2 billion
0.300% next $2 billion
0.280% next $2 billion
0.260% next $3 billion
0.250% next $3 billion
0.240% thereafter
Individual Fund Fee
0.320% of net assets
-11-
<PAGE>
FUND OBJECTIVE FEE RATE
---- --------- --------
AARP Global Growth Fund Long-term growth of capital, consistent with a Fee Rate Program
stable share price, through investment primarily Assets
in a diversified portfolio of equity securities 0.350% to $2 billion
of corporations worldwide. 0.330% next $2 billion
0.300% next $2 billion
0.280% next $2 billion
0.260% next $3 billion
0.250% next $3 billion
0.240% thereafter
Individual Fund Fee
0.550% of net assets
AARP Growth and Income Fund Long-term growth of capital and income, Fee Rate Program
consistent with a stable share price, through Assets
investment primarily in common stocks and 0.350% to $2 billion
securities convertible into common stocks. 0.330% next $2 billion
0.300% next $2 billion
0.280% next $2 billion
0.260% next $3 billion
0.250% next $3 billion
0.240% thereafter
Individual Fund Fee
0.190% of net assets
-12-
<PAGE>
FUND OBJECTIVE FEE RATE
---- --------- --------
AARP International Stock Fund Long-term growth of capital, consistent with a Fee Rate Program
stable share price, through investment primarily Assets
in foreign equity securities. 0.350% to $2 billion
0.330% next $2 billion
0.300% next $2 billion
0.280% next $2 billion
0.260% next $3 billion
0.250% next $3 billion
0.240% thereafter
Individual Fund Fee
0.600% of net assets
AARP Small Company Stock Fund Long-term growth of capital, consistent with a Fee Rate Program
stable share price, through investment primarily Assets
in stocks of small U.S. companies. 0.350% to $2 billion
0.330% next $2 billion
0.300% next $2 billion
0.280% next $2 billion
0.260% next $3 billion
0.250% next $3 billion
0.240% thereafter
Individual Fund Fee
0.550% of net assets
-13-
<PAGE>
FUND OBJECTIVE FEE RATE
---- --------- --------
AARP U.S. Stock Index Fund Long-term growth of capital, consistent with Fee Rate Program
greater share price stability than a S&P 500 Assets
index fund, by taking an indexing approach to 0.350% to $2 billion
investing in common stocks, emphasizing higher 0.330% next $2 billion
dividend stocks while maintaining investment 0.300% next $2 billion
characteristics otherwise similar to the S&P 500 0.280% next $2 billion
index. 0.260% next $3 billion
0.250% next $3 billion
0.240% thereafter
Individual Fund Fee
0.000% of net assets
AARP Bond Fund for Income High level of current income, consistent with Fee Rate Program
greater share price stability than a long term Assets
bond, through investment primarily in 0.350% to $2 billion
investment-grade debt securities. 0.330% next $2 billion
0.300% next $2 billion
0.280% next $2 billion
0.260% next $3 billion
0.250% next $3 billion
0.240% thereafter
Individual Fund Fee
0.280% of net assets
-14-
<PAGE>
FUND OBJECTIVE FEE RATE
---- --------- --------
AARP GNMA and U.S. Treasury Fund High level of current income, consistent with Fee Rate Program
greater share price stability than a long-term Assets
bond, through investment principally in U.S. 0.350% to $2 billion
Government-guaranteed GNMA securities and U.S. 0.330% next $2 billion
Treasury obligations. 0.300% next $2 billion
0.280% next $2 billion
0.260% next $3 billion
0.250% next $3 billion
0.240% thereafter
Individual Fund Fee
0.120% of net assets
AARP High Quality Bond Fund High level of income, consistent with greater Fee Rate Program
share price stability than a long-term bond, Assets
through investment primarily in a portfolio of 0.350% to $2 billion
high quality securities 0.330% next $2 billion
0.300% next $2 billion
0.280% next $2 billion
0.260% next $3 billion
0.250% next $3 billion
0.240% thereafter
Individual Fund Fee
0.190% of net assets
-15-
<PAGE>
FUND OBJECTIVE FEE RATE
---- --------- --------
AARP Diversified Growth Portfolio Long-term growth of capital through investment There will be no fee as
primarily in AARP stock mutual funds. the manager will receive a
fee from the underlying
funds.
AARP Diversified Income Portfolio Current income with modest capital appreciation There will be no fee as
through investment primarily in AARP bond mutual the manager will receive a
funds. fee from the underlying
funds.
AARP High Quality Tax Free Money Current income exempt from federal income taxes Fee Rate Program
Fund and liquidity, consistent with maintaining Assets
stability and safety of principal, through
investment in high-quality municipal securities. 0.350% to $2 billion
0.330% next $2 billion
0.300% next $2 billion
0.280% next $2 billion
0.260% next $3 billion
0.250% next $3 billion
0.240% thereafter
Individual Fund Fee
0.100% of net assets
-16-
<PAGE>
FUND OBJECTIVE FEE RATE
---- --------- --------
AARP Insured Tax Free General Bond High level of income free from federal Fee Rate Program
Fund taxes, consistent with greater share price Assets
stability than a long-term municipal bond, 0.350% to $2 billion
through investment primarily in municipal 0.330% next $2 billion
securities covered by insurance. 0.300% next $2 billion
0.280% next $2 billion
0.260% next $3 billion
0.250% next $3 billion
0.240% thereafter
Individual Fund Fee
0.190% of net assets
</TABLE>
-17-
<PAGE>
Exhibit C
---------
Marked Restated Declarations
<PAGE>
DRAFT
7/19/97
SCUDDER CASH INVESTMENT TRUST
AMENDED AND RESTATED DECLARATION OF TRUST
DATED ___________________, 1997 ^
Unless otherwise indicated, with respect to particular provisions, the adoption
of the Amended and Restated Declaration of Trust requires an affirmative vote of
a majority of the outstanding voting securities of the Trust as defined in the
Investment Company Act of 1940, as amended.
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I.....................................................................1^
Section 1.1. Name.....................................................1
Section 1.2. Definitions..............................................1
ARTICLE II....................................................................3^
Section 2.1. General Powers...........................................3
Section 2.2. Investments..............................................3
Section 2.3. Legal Title..............................................5
Section 2.4. Issuance and Repurchase of Shares........................5
Section 2.5. Delegation; Committees...................................5
Section 2.6. Collection and Payment...................................5
Section 2.7. Expenses.................................................6
Section 2.8. Manner of Acting; By-laws................................6
Section 2.9. Miscellaneous Powers.....................................6
Section 2.10. Principal Transactions..................................7
Section 2.11. Number of Trustees......................................7
Section 2.12. Election and Term.......................................7
Section 2.13. Resignation and Removal.................................7
Section 2.14. Vacancies...............................................8
Section 2.15. Delegation of Power to Other Trustees...................8
Section 2.16. Shareholder Vote, etc...................................8
ARTICLE III...................................................................8^
Section 3.1. Distribution Contract....................................8
Section 3.2. Advisory or Management Contract..........................9
Section 3.3. Affiliations of Trustees or Officers, Etc................9
Section 3.4. Compliance with 1940 Act.................................9
ARTICLE IV...................................................................10^
Section 4.1. No Personal Liability of Shareholders, Trustees, Etc....10
Section 4.2. Non-Liability of Trustees, Etc..........................10
Section 4.3. Mandatory Indemnification...............................10
Section 4.4. No Bond Required of Trustees............................12
Section 4.5. No Duty of Investigation; Notice in Trust
Instruments, Etc.......................................12
Section 4.6. Reliance on Experts, Etc................................12
ARTICLE V....................................................................12^
Section 5.1. Beneficial Interest.....................................12
Section 5.2. Rights of Shareholders..................................13
Section 5.3. Trust Only..............................................13
Section 5.4. Issuance of Shares......................................13
Section 5.5. Register of Shares......................................13
Section 5.6. Transfer of Shares......................................14
Section 5.7. Notices, Reports........................................14
Section 5.8. Treasury Shares.........................................14
<PAGE>
Section 5.9. Voting Powers...........................................14
Section 5.10. Meetings of Shareholders...............................15
Section 5.11. Series Designation.....................................15
Section 5.12. Assent to Declaration of Trust.........................17
Section 5.13. Class Designation......................................17
ARTICLE VI...................................................................18^
Section 6.1. Redemption of Shares....................................18
Section 6.2. Price...................................................18
Section 6.3. Payment.................................................18
Section 6.4. Effect of Suspension of Determination of Net
Asset Value...........................................18
Section 6.5. Repurchase by Agreement.................................19
Section 6.6. Redemption of Shareholder's Interest....................19
Section 6.7. Redemption of Shares in Order to Qualify as
Regulated Investment Company; Disclosure of Holding...19
Section 6.8. Reductions in Number of Outstanding Shares
Pursuant to Net Asset Value Formula...................19
Section 6.9. Suspension of Right of Redemption.......................20
ARTICLE VII..................................................................20^
Section 7.1. Net Asset Value.........................................20
Section 7.2. Distributions to Shareholders...........................21
Section 7.3. Determination of Net Income; Constant Net
Asset Value; Reduction of Outstanding Shares..........21
Section 7.4. Allocation Between Principal and Income.................22
Section 7.5. Power to Modify Foregoing Procedures....................22
ARTICLE VIII.................................................................22^
Section 8.1. Duration................................................22
Section 8.2. Termination of Trust....................................22
Section 8.3. Amendment Procedure.....................................23
Section 8.4. Merger, Consolidation and Sale of Assets................24
Section 8.5. Incorporation...........................................24
ARTICLE IX...................................................................24^
ARTICLE X....................................................................25^
Section 10.1. Filing.................................................25
Section 10.2. Governing Law..........................................25
Section 10.3. Counterparts...........................................25
Section 10.4. Reliance by Third Parties..............................25
Section 10.5. Provisions in Conflict with Law or Regulations.........25
- ii -
<PAGE>
AMENDED AND RESTATED DECLARATION OF TRUST
OF
SCUDDER CASH INVESTMENT TRUST
DATED ^____________, 1997
AMENDED AND RESTATED DECLARATION OF TRUST made ^__________ _____, 1997,
by the undersigned Trustees;
WHEREAS, pursuant to a Declaration of Trust dated December 12, 1975, as
amended and restated, the Trustees^ established a Massachusetts business trust
for the investment and reinvestment of funds contributed thereto, the beneficial
interest in which is divided into transferable shares;^
WHEREAS, the Trustees desire to amend and restate said Declaration of
Trust in its entirety;
NOW, THEREFORE, the Trustees restate the Declaration of Trust as
follows:
ARTICLE I
NAME AND DEFINITIONS
Section 1.1. ^ Name.
The name of the ^ Trust created hereby is the "Scudder Cash Investment
Trust".
Section 1.2. Definitions.
Wherever they are used herein, the following terms have the following
respective meanings:
(a) "By-laws" means the By-laws referred to in Section 2.8 hereof, as
from time to time amended.
(b) ** 1 ^"Class" means the two or more Classes as may be established
and designated from time to time by the Trustees pursuant to Section 5.13
hereof.
(c) The term "Commission" has the meaning given it in the 1940 Act. The
term "Interested Person" has the meaning given it in the 1940 Act, as modified
by any applicable order or orders of the Commission. Except as otherwise defined
by the Trustees in conjunction with the establishment of any series of Shares,
the term "vote of a majority of the Shares outstanding and entitled to vote"
shall have the same meaning as the term ^"vote of a majority of the outstanding
voting securities" given it in the 1940 Act.
(d) "Custodian" means any Person other than the Trust who has custody
of any Trust Property as required by Section 17(f) of the 1940 Act, but does not
include a system for the central handling of securities described in said
Section 17(f).
(e) "Declaration" means this Amended and Restated Declaration of Trust
as further amended from time to time. Reference in this Declaration of Trust to
"Declaration," "hereof,"
<PAGE>
"herein," and "hereunder" shall be deemed to refer to this Declaration rather
than exclusively to the article or section in which such words appear.
(f) "Distributor" means the party, other than the Trust, to the
contract described in Section 3.1 hereof.
(g) "His" shall include the feminine and neuter, as well as the
masculine^ genders.
(h) "Investment Adviser" means the party, other than the Trust, to the
contract described in Section 3.2 hereof.
(i) "Municipal Bonds" means obligations issued by or on behalf of
states, territories of the United States and the District of Columbia and their
political subdivisions, agencies and instrumentalities, or other issuers, the
interest from which is exempt from regular Federal income tax.
(j) The "1940 Act" means the Investment Company Act of 1940, as amended
from time to time.
(k) ^"Person" means and includes individuals, corporations,
partnerships, trusts, associations, joint ventures and other entities, whether
or not legal entities, and governments and agencies and political subdivisions
thereof.
(l) ^"Series" individually or collectively means the two or more Series
as may be established and designated from time to time by the Trustees pursuant
to Section 5.11 hereof. Unless the context otherwise requires, the term "Series"
shall include Classes into which shares of the Trust, or of a Series, may be
divided from time to time.
(m) ^"Shareholder" means a record owner of Outstanding Shares.
(n) "Shares" means the equal proportionate units of interest into which
the beneficial interest in the Trust shall be divided from time to time,
including the Shares of any and all Series and Classes which may be established
by the Trustees and includes fractions of Shares as well as whole Shares.
"Outstanding Shares" means those ^ Shares shown as of a time and from time to
time on the books of the Trust or its Transfer Agent as then issued and
outstanding, but shall not include Shares which have been redeemed or
repurchased by the Trust and which are at the time held in the Treasury of the
Trust.
(o) "Transfer Agent" means any one or more Persons other than the Trust
who maintains the Shareholder records of the Trust, such as the list of
Shareholders, the number of Shares credited to each account, and the like.
(p) The "Trust" means the Scudder Cash Investment Trust^
(q) The "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account of the
Trust or the Trustees.
(r) The "Trustees" means the person or persons who has or have signed
this Declaration, so long as he or they shall continue in office in accordance
with the terms hereof, and all other persons who may from time to time be duly
qualified and serving as Trustees in accordance with the provisions of Article
II hereof, and reference herein to a Trustee or the
- 2 -
<PAGE>
Trustees shall refer to such person or persons in this capacity or their
capacities as trustees hereunder.
* 1 MOVED FROM HERE; TEXT NOT SHOWN
ARTICLE II
TRUSTEES
Section 2.1. ^ General Powers.
The Trustees shall have exclusive and absolute control over the Trust
Property and over the business of the Trust 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 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
both within and 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
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 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.
Section 2.2. Investments.
The Trustees shall have the power:
(a) To operate as and carry on the business of an investment company,
and exercise all the powers necessary and appropriate to the conduct of such
operations.
(b) To invest in, hold for investment, or reinvest in, securities,
including shares of open-end investment companies; common and preferred stocks;
warrants; bonds, debentures, bills, time notes and all other evidences of
indebtedness; negotiable or non-negotiable instruments; government securities,
including securities of any state, municipality or other political subdivision
thereof, or any governmental or quasi-governmental agency or instrumentality;
and money market instruments including bank certificates of deposit, finance
paper, commercial paper, bankers acceptances and all kinds of repurchase
agreements, of any corporation,^ company, trust, association, firm or other
business organization however established, and of any country, state,
municipality or other political subdivision, or any governmental or
quasi-governmental agency or instrumentality.
(c) To acquire (by purchase, subscription or otherwise), to hold, to
trade in and deal in, to acquire any rights or options to purchase or sell, to
sell or otherwise dispose of, to lend, and to pledge any such securities and to
enter into repurchase agreements and forward foreign currency exchange
contracts, to purchase and sell futures contracts on securities, securities
indices
- 3 -
<PAGE>
and foreign currencies, to purchase or sell options on such contracts, ^ foreign
currency contracts, and foreign currencies and to engage in all types of hedging
and risk management transactions.
(d) To exercise all rights, powers and privileges of ownership or
interest in all securities, repurchase agreements, futures contracts and options
and other assets included in the Trust Property, including the right to vote
thereon and otherwise act with respect thereto and to do all acts for the
preservation, protection, improvement and enhancement in value of all such
assets.
(e) To acquire (by purchase, lease or otherwise) and to hold, use,
maintain, develop and dispose of (by sale or otherwise) any property, real or
personal, including cash, and any interest therein.
(f) To borrow money and in this connection issue notes or other ^
evidence of indebtedness; to secure borrowings by mortgaging, pledging or
otherwise subjecting as security the Trust Property; to endorse, guarantee, or
undertake the performance of any obligation or engagement of any other Person
and to lend Trust Property.
(g) To aid by further investment any corporation, company, trust,
association or firm, any obligation of or interest in which is included in the
Trust Property or in the affairs of which the Trustees have any direct or
indirect interest; to do all acts and things designed to protect, preserve,
improve or enhance the value of such obligation or interest, and to guarantee or
become surety on any or all of the contracts, stocks, bonds, notes, debentures
and other obligations of any such corporation, company, trust, association or
firm.
(h) To 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 the sale of Shares.
(i) To invest, through a transfer of cash, securities and other assets
or otherwise, all or a portion of the Trust Property, or to sell all or a
portion of the Trust Property and invest the proceeds of such sales, in another
investment company that is registered under the 1940 Act.1
(j) In general to carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything necessary, suitable
or proper for the accomplishment of any purpose or the attainment of any object
or the furtherance of any power hereinbefore set forth, either alone or in
association with others, and to do every other act or thing incidental or
appurtenant to or growing out of or connected with the aforesaid business or
purposes, objects or powers.
The foregoing clauses shall be construed both as objects and powers,
and the foregoing enumeration of specific powers shall not be held to limit or
restrict in any manner the general powers of the Trustees.
_____________________
1 Adoption of this Section requires affirmative vote of two thirds of the
shares of the Trust outstanding and entitled to vote.
- 4 -
<PAGE>
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.
Section 2.3. Legal Title.
Legal title to all the Trust Property, including the property of any
Series of the Trust, shall be vested in the Trustees as joint tenants except
that the Trustees shall have power to cause legal title to any Trust Property to
be held by or in the name of one or more of the Trustees, or in the name of the
Trust, or in the name of any other Person as nominee, on such terms as the
Trustees may determine, provided that the interest of the Trust therein is
deemed appropriately ^ protected. The right, title and interest of the Trustees
in the Trust Property and the property of each Series of the Trust shall vest
automatically in each Person who may hereafter become a Trustee. Upon the
termination of the term of office, resignation, removal or death of a Trustee he
shall automatically cease to have any right, title or interest in any of the
Trust Property or the property of any Series of the Trust, and the right, title
and interest of such Trustee in the Trust Property shall vest automatically in
the remaining Trustees. Such vesting and cessation of title shall be effective
whether or not conveyancing documents have been executed and delivered.
Section 2.4. Issuance and Repurchase of Shares.
The Trustees shall have the power to issue, sell, repurchase, redeem,
retire, cancel, acquire, hold, resell, reissue, dispose of, transfer, and
otherwise deal in Shares and, subject to the provisions set forth in Articles VI
and VII and Section 5.11 hereof, to apply to any such repurchase, redemption,
retirement, cancellation or acquisition of Shares any funds or property of the
particular series of the Trust with respect to which such Shares are issued,
whether capital or surplus or otherwise, to the full extent now or hereafter
permitted by the laws of the Commonwealth of Massachusetts governing business
corporations.
Section 2.5. Delegation; Committees.
The Trustees shall have power 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
the names of the Trustees or otherwise as the Trustees may deem expedient, to
the same extent as such delegation is permitted by the 1940 Act.
Section 2.6. Collection and Payment.
The Trustees shall have power to collect all property due to the Trust;
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.
Section 2.7. Expenses.
The Trustees shall have the 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.
- 5 -
<PAGE>
Section 2.8. 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 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 or repeal such By-laws to
the extent such power is not reserved to the Shareholders.
Notwithstanding the foregoing provisions of this Section 2.8 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.
Section 2.9. Miscellaneous Powers.
Subject to Section 5.11^ hereof, 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; (b) enter into joint ventures,
partnerships and any other combinations or associations; (c) remove Trustees or
fill vacancies in or add to their number, elect and remove such officers and
appoint and terminate such agents or employees as they consider appropriate, and
appoint from their own number, and terminate, any one or more committees which
may exercise some or all of the power and authority of the Trustees as the
Trustees may determine; (d) purchase, and pay for out of Trust Property,
insurance policies insuring the Shareholders, Trustees, officers, employees,
agents, investment advisers, distributors, selected dealers 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 constituting negligence, or whether or not the
Trust would have the power to indemnify such Person against such liability; (e)
establish pension, profit-sharing, share purchase, and other retirement,
incentive and benefit plans for any Trustees, officers, employees and agents of
the Trust; (f) to the extent permitted by law, indemnify any person with whom
the Trust has dealings, including the Investment Adviser, Distributor, Transfer
Agent and selected dealers, 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 and the method by which its accounts shall
be kept; and (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.
Section 2.10. Principal Transactions.
Except in transactions not permitted by the 1940 Act or rules and
regulations adopted by the Commission, the Trustees may, on behalf of the Trust,
buy any securities from or sell any securities to, or lend any assets of the
Trust to, any Trustee or officer of the Trust or any firm of which any such
Trustee or officer is a member acting as principal, or have any such dealings
with the Investment Adviser, Distributor or ^ transfer agent or with any
Interested Person ^ or such Person; and the Trust may employ any such Person, or
firm or company in which such Person is
- 6 -
<PAGE>
an Interested Person, as broker, dealer, legal counsel, registrar, ^ transfer
agent, dividend disbursing agent or ^ Custodian upon customary terms.
Section 2.11. Number of Trustees.
The number of Trustees shall initially be one (1), and thereafter shall
be such number as shall be fixed from time to time by a written instrument
signed by a majority of the Trustees^.
Section 2.12. Election and Term.
Except for the Trustees named herein or appointed to fill vacancies
pursuant to Section 2.14 hereof, the Trustees shall be elected by the
Shareholders owning of record a plurality of the Shares voting at a meeting of
Shareholders. Such a meeting shall be held on a date fixed by the Trustees.
Except in the event of resignation or removals pursuant to Section 2.13 hereof,
each Trustee shall hold office until such time as less than a majority of the
Trustees holding office have been elected by Shareholders, and thereafter until
the holding of a Shareholders' meeting as required by the next following
sentence. In such event the Trustees then in office will call a Shareholders'
meeting for the election of Trustees. Except for the foregoing circumstances,
the Trustees shall continue to hold office and may appoint successor ^ Trustees.
Section 2.13. Resignation and Removal.
Any Trustee may resign his trust (without the need for any prior or
subsequent accounting) by an instrument in writing signed by him and delivered
to the other Trustees and such resignation shall be effective upon such
delivery, or at a later date according to the terms of the instrument. Any of
the Trustees may be removed (provided the aggregate number of Trustees after
such removal shall not be less than one) with cause, by the action of two-thirds
of the remaining Trustees. Any Trustee may be removed at any meeting of
Shareholders by vote of two-thirds of the Outstanding Shares. The Trustees shall
promptly call a meeting of the shareholders for the purpose of voting upon the
question of removal of any such Trustee or Trustees when requested in writing so
to do by the holders of not less than ten percent of the Outstanding Shares^
and, in that connection, the Trustees will assist shareholder communications to
the extent provided for in Section 16(c) under the 1940 Act. 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 or property of any series of the Trust held in the name of the
resigning or removed Trustee. Upon the incapacity or death of any Trustee, his
legal representative shall execute and deliver on his behalf such documents as
the remaining Trustees shall require as provided in the preceding sentence.
Section 2.14. Vacancies.
The term of office of a Trustee shall terminate and a vacancy shall
occur in the event of the death, 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, made by a written
instrument signed by a majority of the Trustees then in office. Any such
appointment shall not become effective, however, until the person named in the
written
- 7 -
<PAGE>
instrument of appointment shall have accepted in writing such appointment and
agreed in writing to be bound by the terms of the Declaration. 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 2.14, 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.
Section 2.15. Delegation of Power to Other Trustees.
Any Trustee may, by power of attorney, delegate his power for a period
not exceeding six (6) months at any one time to any other Trustee or Trustees;
provided that in no case shall less than two (2) Trustees personally exercise
the powers granted to the Trustees under this Declaration except as herein
otherwise expressly provided.
Section 2.16. Shareholder Vote, etc. Not Required.
Except to the extent specifically provided to the contrary in this
Declaration, the Trustees may exercise each of the powers granted to them in
this Declaration without the vote, approval or agreement of the Shareholders,
unless such a vote, approval or agreement is required by the 1940 Act or
applicable laws of the Commonwealth of Massachusetts.
ARTICLE III
CONTRACTS
Section 3.1. ^ Distribution Contract.
The Trustees may in their discretion from time to time enter into an
exclusive or non-exclusive underwriting contract or contracts providing for the
sale of the Shares at a price based on the net asset value of a Share, whereby
the Trustees may either agree to sell the Shares to the other party to the
contract or appoint such other party their sales agent for the Shares, and in
either case on such terms and conditions, if any, as may be prescribed in the
By-laws, and such further terms and conditions as the Trustees may in their
discretion determine not inconsistent with the provisions of this Article III or
of the By-laws; and such contract may also provide for the repurchase of the
Shares by such other party as agent of the Trustees.
Section 3.2. Advisory or Management Contract.
The Trustees may in their discretion from time to time enter into an
investment advisory or management contract or separate advisory contracts with
respect to one or more Series whereby the other party to such contract shall
undertake to furnish to the Trust such management, investment advisory,
statistical and research facilities and services and such other facilities and
services, if any, and all upon such terms and conditions as the Trustees may in
their discretion determine, including the grant of authority to such other party
to determine what securities shall be purchased or sold by the Trust and what
portion of its assets shall be uninvested, which authority shall include the
power to make changes in the investments of the Trust or any Series.
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The Trustees may also employ, or authorize the Investment Adviser to
employ, one or more sub-advisers from time to time to perform such of the acts
and services of the Investment Adviser and upon such terms and conditions as may
be agreed upon between the Investment Adviser and such sub-advisers and approved
by the Trustees. Any reference in this Declaration to the Investment Adviser
shall be deemed to include such ^ sub-advisers unless the context otherwise
requires.
Section 3.3. Affiliations of Trustees or Officers, Etc.
The fact that:
(i) any of the Shareholders, Trustees or officers of the
Trust is a shareholder, director, officer, partner, trustee, employee,
manager, adviser or distributor of or for any partnership, corporation,
trust, association or other organization or of or for any parent or
affiliate of any organization, with which a contract of the ^ character
described in Sections 3.1 or 3.2 above or ^ for services as Custodian,
Transfer Agent, accounting agent or disbursing agent or for related
services may have been or may hereafter be made, or that any such
organization, or any parent or affiliate thereof, is a Shareholder of
or has an interest in the Trust, or that
(ii) any partnership, corporation, trust, association or
other organization with which a contract of the character described in
Sections 3.1 or 3.2 above or for services as Custodian, Transfer Agent,
accounting agent or disbursing agent or for related services may have
been or may hereafter be made also has any one or more of such
contracts with one or more other partnerships, corporations, trusts,
associations or other organizations, or has other business or
interests, shall not affect the validity of any such contract or
disqualify any Shareholder, Trustee or officer of the Trust from voting
upon or executing the same or create any liability or accountability to
the Trust or its Shareholders.
Section 3.4. Compliance with 1940 Act.
Any contract entered into pursuant to Sections 3.1 or 3.2 shall be
consistent with and subject to the requirements of Section 15 of the 1940 Act
(including any amendment thereof or other applicable act of Congress hereafter
enacted), as modified by any applicable order or orders of the Commission, with
respect to its continuance in effect, its termination and the method of
authorization and approval of such contract or renewal thereof.
ARTICLE IV
LIMITATIONS OF LIABILITY OF SHAREHOLDERS,
TRUSTEES AND OTHERS
Section 4.1. ^ No Personal Liability of Shareholders, Trustees, Etc.
No Shareholder shall be subject to any personal liability whatsoever to
any Person in connection with Trust Property or the acts, obligations or affairs
of the Trust. No Trustee, officer, employee or agent of the Trust shall be
subject to any personal liability whatsoever to any Person, other than to the
Trust or its Shareholders, in connection with Trust Property or the affairs of
the Trust, save only that arising from bad faith, willful misfeasance, gross
negligence or reckless disregard of his duties with respect to such Person; and
all such Persons shall look solely to the Trust Property for satisfaction of
claims of any nature arising in connection with the affairs
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of the Trust. If any Shareholder, Trustee, officer, employee, or agent, as such,
of the Trust, is made a ^ part to any suit or proceeding to enforce any such
liability of the Trust, he shall not, on account thereof, be held to any
personal liability. The Trust shall indemnify and hold each Shareholder harmless
from and against all claims and liabilities, to which such Shareholder may
become subject by reason ^ for his being or having been a Shareholder, and shall
reimburse such Shareholder for all legal and other expenses reasonably incurred
by him in connection with any such claim or liability. The indemnification and
reimbursement required by the preceding sentence shall be made only out of the
assets of the one or more Series of which the Shareholder who is entitled to
indemnification or reimbursement was a Shareholder at the time the act or event
occurred which gave rise to the claim against or liability of said Shareholder.
The rights accruing to a Shareholder under this Section 4.1 shall not impair any
other right to which such Shareholder may be lawfully entitled, nor shall
anything herein contained restrict the right of the Trust to indemnify or
reimburse a Shareholder in any appropriate situation even though not
specifically provided herein.
Section 4.2. Non-Liability of Trustees, Etc.
No Trustee, officer, employee or agent of the Trust shall be liable to
the Trust, its Shareholders, or to any Shareholder, 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 the duties involved in the conduct of his
office.
Section 4.3. Mandatory Indemnification.
(a) Subject to the exceptions and limitations contained in paragraph
(b) below:
(i) every person who is, or has been, a Trustee or officer of
the Trust shall be indemnified by the Trust 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, administrative 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 Shareholders by reason of a final adjudication by a court or other
body before which a proceeding was brought that he engaged in 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;
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(iii) in the event of a settlement or other disposition not
involving a final adjudication as provided in paragraph (b)(i) or
(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; or
(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 Disinterested Trustees acting on the matter
(provided that a majority of the Disinterested Trustees then
in office act on the matter) or (y) written opinion of
independent legal counsel.
(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 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 4.3 may be advanced by the Trust 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 4.3, provided that either:
(i) such undertaking is secured by a surety bond or some
other appropriate security provided by the recipient, or the Trust
shall be insured against losses arising out of any such advances; or
(ii) a majority of the Disinterested Trustees acting on the
matter (provided that a majority of the Disinterested 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 4.3, a "Disinterested Trustee" is one
who is not (i) 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), or (ii) involved in the claim,
action, suit or proceeding.
Section 4.4. No Bond Required of Trustees.
No Trustee shall be obligated to give any bond or other security for
the performance of any of his duties hereunder.
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Section 4.5. No Duty of Investigation; Notice in Trust Instruments,
Etc.
No purchaser, lender, transfer agent or other Person dealing with the
Trustees or any officer, employee or agent of the Trust 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, Share, other security of the Trust or
undertaking, and every other act or thing whatsoever executed in connection with
the Trust shall be conclusively presumed to have been executed or done by the
executors thereof only in their capacity as Trustees under this Declaration or
in their capacity as officers, employees or agents of the Trust. Every written
obligation, contract, instrument, certificate, Share, other security of the
Trust or undertaking made or issued by the Trustees may recite that the same is
executed or made by them not individually, but as Trustees under the
Declaration, and that the obligations of the Trust under any such instrument are
not binding upon any of the Trustees or Shareholders individually, but bind only
the trust estate, and may contain any further recital which they or he may deem
appropriate, but the omission of such recital shall not operate to bind the
Trustees individually. The Trustees shall at all times maintain insurance for
the protection of the Trust Property, its Shareholders, 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.
Section 4.6. Reliance on Experts, Etc.
Each Trustee and officer or employee of the Trust shall, in the
performance of his duties, be fully and completely justified and protected with
regard to any act or any failure to act resulting from reliance in good faith
upon the books of account or other records of the Trust, upon an opinion of
counsel, or upon reports made to the Trust by any of its officers or employees
or by the Investment Adviser, the Distributor, Transfer Agent, selected dealers,
accountants, appraisers 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 V
SHARES OF BENEFICIAL INTEREST
Section 5.1. ^ Beneficial Interest.
The interest of the beneficiaries hereunder shall be divided into
transferable Shares of beneficial interest, all of one class, except as provided
in Section 5.11 and Section 5.13 hereof, par value ^ $.01 per share. The number
of Shares of beneficial interest authorized hereunder is unlimited. All Shares
issued hereunder including, without limitation, Shares issued in connection with
a dividend in Shares or a split of Shares, shall be fully paid and
non-assessable.
Section 5.2. Rights of Shareholders.
The ownership of the Trust Property and the property of each Series of
the Trust of every description and the right to conduct any business ^
herein-before described are vested exclusively in the Trustees, and the
Shareholders shall have no interest therein other than the beneficial interest
conferred by their Shares, and they shall have no right to call for any
partition or division of any property, profits, rights or interests of the Trust
nor can they be called upon to share or
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assume any losses of the Trust or suffer an assessment of any kind by virtue of
their ownership of Shares. The Shares shall be personal property giving only the
rights specifically set forth in this Declaration. The Shares shall not entitle
the holder to preference, preemptive, appraisal, conversion or exchange rights,
except as the Trustees may determine with respect to any Series of Shares.
Section 5.3. Trust Only.
It is the intention of the Trustees to create only the relationship of
Trustee and beneficiary between the Trustees and each Shareholder from time to
time. It^ is not the intention of the Trustees to create a general partnership,
limited partnership, joint stock association, corporation, bailment or any form
of legal relationship other than a trust. Nothing in this Declaration ^ shall be
construed to make the Shareholders, either by themselves or with the Trustees,
partners or members of a joint stock association.
Section 5.4. Issuance of Shares.
The Trustees in their discretion may, from time to time without vote of
the Shareholders, issue Shares, in addition to the then issued and outstanding
Shares and Shares held in the treasury, 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 Shares, the Trustees may issue fractional Shares and Shares
held in the treasury. The Trustees may from time to time divide or combine the
Shares into a greater or lesser number without thereby changing the
proportionate beneficial interests in the Trust. Contributions to the Trust may
be accepted for, and Shares shall be redeemed as, whole Shares and/or 1/1,000ths
of a Share or integral multiples thereof.
Section 5.5. Register of Shares.
A register shall be kept at the principal office of the Trust or an
office of the Transfer Agent which shall contain the names and addresses of the
Shareholders and the number of Shares held by them respectively and a record of
all transfers thereof. Such register shall be conclusive as to who are the
holders of the Shares and who shall be entitled to receive dividends or
distributions or otherwise to exercise or enjoy the rights of Shareholders. No
Shareholder shall be entitled to receive payment of any dividend or
distribution, nor to have notice given to him as herein or in the By-laws
provided, until he has given his address to the Transfer Agent or such other
officer or agent of the Trustees as shall keep the said register for entry
thereon. It is not contemplated that certificates will be issued for the Shares;
however, the Trustees, in their discretion, may authorize the issuance of share
certificates and promulgate appropriate rules and regulations as to their use.
Section 5.6. Transfer of Shares.
Except as otherwise provided by the Trustees, ^ shares shall be
transferable on the records of the Trust only by the record holder thereof or by
his agent thereunto duly authorized ^, upon delivery to the Trustees or the
Transfer Agent of a duly executed instrument of transfer, together with such
evidence of the genuineness of each such execution and authorization and of
other matters as may reasonably be required. Upon such delivery the transfer
shall be recorded on the register of the Trust. Until such record is made, the
Shareholder of record shall be deemed to
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be the holder of such Shares for all purposes hereunder and neither the Trustees
nor any transfer agent or registrar nor any officer, employee or agent of the
Trust shall be affected by any notice of the proposed transfer.
Any person becoming entitled to any Shares in consequence of the death,
bankruptcy, or incompetence of any Shareholder, or otherwise by operation of
law, shall be recorded on the register of Shares as the holder of such Shares
upon production of the proper evidence thereof to the Trustees or the Transfer
Agent, but until such record is made, the Shareholder of record shall be deemed
to be the holder of such Shares for all purposes hereunder and neither the
Trustees nor any Transfer Agent or registrar nor any officer or agent of the
Trust shall be affected by any notice of such death, bankruptcy or incompetence,
or other operation of law.
Section 5.7. Notices, Reports.
Any and all notices to which any Shareholder may be entitled and any
and all communications shall be deemed duly served or given if mailed, postage
prepaid, addressed to any Shareholder of record at his last known address as
recorded on the register of the Trust. A notice of a meeting, an annual report
and any other communication to Shareholders need not be sent to a Shareholder
(i) if an annual report and a proxy statement for two consecutive shareholder
meetings have been mailed to such Shareholder's address and have been returned
as undeliverable, (ii) if all, and at least two, checks (if sent by first class
mail) in payment of dividends on Shares during a twelve-month period have been
mailed to such Shareholder's address and have been returned as undeliverable or
(iii) in any other case in which a proxy statement concerning a meeting of
security holders is not required to be given^ pursuant to the Commission's proxy
rules as from time to time in effect under the Securities Exchange Act of 1934.
However, delivery of such proxy statements, annual reports and other
communications shall resume if and when such Shareholder delivers or causes to
be delivered to the Trust written notice setting forth such Shareholder's then
current address.
Section 5.8. Treasury Shares.
Shares held in the treasury shall, until reissued pursuant to Section
5.4, not confer any voting rights on the Trustees, nor shall such Shares be
entitled to any dividends or other distributions declared with respect to the
Shares.
Section 5.9. Voting Powers.
The Shareholders shall have power to vote only (i) for the election of
Trustees as provided in Section 2.12; (ii) for the removal of Trustees as
provided in Section 2.13; (iii) with respect to any ^ amendment of this
Declaration to the extent and as provided in Section 8.3; ^(iv) to the same
extent as the stockholders of Massachusetts business corporation as to whether
or not a court action, proceeding or claim should or should not be brought or
maintained derivatively or as a class action on behalf of the Trust or any
Series or Class thereof or the Shareholders (provided, however, that a
Shareholder of a particular Series or Class shall not be entitled to bring a
derivative or class action on behalf of any other Series or Class (or
Shareholder of any other Series or Class) of the Trust); ^ and (v)2 with respect
to such additional matters relating to the Trust as may be required by this
Declaration, the By-laws or any registration of the Trust as an
________________________
2 Adoption of this amended and restated Section requires the affirmative vote
of two thirds of the shares of the Trust outstanding and entitled to vote.
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investment company under the 1940 Act with the Commission (or any successor
agency) or as the Trustees may consider necessary or desirable. Each whole Share
shall be entitled to one vote as to any matter on which it is entitled to vote
and each fractional Share shall be entitled to a proportionate fractional vote,
except that the Trustees may, in conjunction with the establishment of any
Series or Class of Shares, establish or reserve the right to establish
conditions under which the several Series or Classes shall have separate voting
rights or^ no voting rights. There shall be no cumulative voting in the election
of Trustees. Until Shares are issued, the Trustees may exercise all rights of
Shareholders and may take any action required by law, this Declaration or the ^
By-laws to be taken by Shareholders. The By-laws may include further provisions
for Shareholders' votes and meetings and related matters.
Section 5.10. Meetings of Shareholders.
Meetings of Shareholders may be called at any time by the President,
and shall be called by the President and Secretary at the request in writing or
by resolution, of a majority of Trustees, or at the written request of the
holder or holders of ten percent (10%) or more of the total number of Shares
then issued and outstanding of the Trust entitled to vote at such meeting. Any
such request shall state the purpose of the proposed meeting.
Section 5.11. Series Designation.
The Trustees, in their discretion, may authorize the division of Shares
into two or more Series, and the different Series 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; provided,
that all Shares shall be identical except that there may be variations so fixed
and determined between different Series as to investment objective, purchase
price, allocation of expenses, right of redemption, special and relative rights
as to dividends and on liquidation, conversion rights, and conditions under
which the several Series shall have separate voting rights. All references to
Shares in this Declaration shall be deemed to be Shares of any or all ^ Series
as the context may require.
(a) ^ All provisions herein relating to the Trust shall apply equally
to each Series of the Trust except as the context requires otherwise.
(b) The number of authorized Shares and the number of Shares of each
Series that may be issued shall be unlimited. The Trustees may classify or
reclassify any unissued Shares or any Shares previously issued and reacquired of
any Series into one or more Series that may be established and designated from
time to time. The Trustees may hold as treasury Shares (of the same or some
other Series), reissue for such consideration and on such terms as they may
determine, or cancel any Shares of any Series reacquired by the Trust at their
discretion from time to time.
(c) All consideration received by the Trust for the issue or sale of
Shares of a particular Series, together with all assets in which such
consideration is invested or reinvested, all income, earnings, profits, and
proceeds thereof, including any proceeds derived from the sale, exchange or
liquidation of such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, shall
irrevocably belong to that Series for all purposes, subject only to the rights
of creditors of such Series and except as may otherwise be required by
applicable 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, the Trustees shall
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allocate them among any one or more of the Series 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 ^ Shareholders of all Series for all
purposes.
(d) The assets belonging to each particular Series shall be charged
with the liabilities of the Trust in respect of that Series and with all
expenses, costs, charges and reserves attributable to that Series, and any
general liabilities, expenses, costs, charges or reserves of the Trust which are
not readily identifiable as ^ belonging to any particular Series shall be
allocated and charged by the Trustees to and among any one or more of the Series
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 Shareholders of all Series 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 Shareholders. The assets of
a particular Series of the Trust shall, under no circumstances, be charged with
liabilities attributable to any other Series of the Trust. All persons extending
credit to, or contracting with or having any claim against a particular Series
of the Trust shall look only to the assets of that particular Series for payment
of such credit, contract or claim. No Shareholder or former Shareholder of any
Series shall have any claim on or right to any assets allocated or belonging to
any other ^ Series.
(e) Each Share of a Series of the Trust shall represent a beneficial
interest in the net assets of such Series. Each holder of Shares of a Series
shall be entitled to receive his pro rata share of distributions of income and
capital gains made with respect to such Series, except as provided in Section
5.13 hereof. Upon redemption of his Shares or indemnification for liabilities
incurred by reason of his being or having been a Shareholder of a Series, such ^
Shareholder shall be paid solely out of the funds and property of such Series of
the Trust. Upon liquidation or termination of a Series of the Trust,
Shareholders of such Series shall be entitled to receive a pro rata share of the
net assets of such Series, except as provided in Section 5.13 hereof. A
Shareholder 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
Shareholders of any other Series of the Trust.
(f) The establishment and designation of any Series of Shares 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 as otherwise provided in such instrument. The
Trustees may by an instrument executed by a majority of their number abolish any
Series and the establishment and designation thereof. Except as otherwise
provided in this Article V, the Trustees shall have the power to determine the
designations, preferences, privileges, limitations and rights, of each class and
Series of Shares. Each instrument referred to in this paragraph shall have the
status of an amendment to this Declaration.
Section 5.12. Assent to Declaration of Trust.
Every Shareholder, by virtue of having become a shareholder, shall be
held to have expressly assented and agreed to the terms hereof and to have
become a party hereto.
Section 5.13. Class Designation.
The Trustees, in their discretion, may authorize the division of the
Shares of the Trust, or, if any Series be established, the Shares of any Series,
into two or more Classes, and the different
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Classes shall be established and designated, and the variations in the relative
rights and preferences as between the different Classes shall be fixed and
determined, by the Trustees; provided, that all Shares of the Trust or of any
Series shall be identical to all other Shares of the Trust or the same Series,
as the case may be, except that there may be variations between different ^
Classes as to allocation of expenses, right of redemption, special and relative
rights as to dividends and on liquidation, conversion rights, and conditions
under which the several Classes shall have separate voting rights. All
references to Shares in this Declaration shall be deemed to be Shares of any or
all Classes as the context may require.
If the Trustees shall divide the Shares of the Trust or any Series into two or
more Classes, the following provisions shall be applicable:
(a) All provisions herein relating to the Trust, or any Series of the
Trust, shall apply equally to each Class of Shares of the Trust or of any Series
of the Trust, except as the context requires otherwise.
(b) The number of Shares of each Class that may be issued shall be
unlimited. The Trustees may classify or reclassify any ^ Shares or any Series of
any Shares into one or more Classes that may be established and designated from
time to time. The Trustees may hold as treasury Shares (of the same or some
other Class), reissue for such consideration and on such terms as they may
determine, or cancel any Shares of any Class reacquired by the Trust at their
discretion from time to time.
(c) Liabilities, expenses, costs, charges and reserves related to the
distribution of, and other identified expenses that should properly be allocated
to, the Shares of a particular Class may be charged to and borne solely by such
Class and the bearing of expenses solely by a Class of Shares may be
appropriately reflected (in a manner determined by the Trustees) and cause
differences in the net asset value attributable to, and the dividend, redemption
and liquidation rights of, the Shares of different ^ classes. Each allocation of
liabilities, expenses, costs, charges and reserves by the Trustees shall be
conclusive and binding upon the Shareholders of all Classes for all purposes.
(d) The establishment and designation of any Class of Shares 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 Class, or as otherwise provided in such instrument. The
Trustees may, by an instrument executed by a majority of their number, abolish
any Class and the establishment and designation thereof. Each instrument
referred to in this paragraph shall have the status of an amendment to this
Declaration.
ARTICLE VI
REDEMPTION AND REPURCHASE OF SHARES
Section 6.1. ^ Redemption of Shares.
All Shares ^ of the Trust shall be redeemable, at the redemption price
determined in the manner set out in this Declaration. Redeemed or repurchased
Shares may be resold by the Trust.
The Trust shall redeem the Shares upon the appropriately verified
written application of the record holder thereof (or upon such other form of
request as the Trustees may determine) at such office or agency as may be
designated from time to time for that purpose in the Trust's then
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effective registration statement under the Securities Act of 1933. The Trustees
may from time to time specify additional conditions, not inconsistent with the
1940 Act, regarding the redemption of Shares in the Trust's then effective
registration statement under the Securities Act of 1933.
Section 6.2. Price.
Shares shall be redeemed at their net asset value, which may be reduced
by any redemption fee authorized by the Trustees, determined as set forth in
Section 7.1 hereof as of such time as the Trustees shall have theretofore
prescribed by resolution. In the absence of such resolution, the redemption
price of Shares deposited shall be the net asset value of such Shares next
determined as set forth in Section 7.1 hereof after receipt of such application.
Section 6.3. Payment.
Payment for such Shares shall be made in cash or in property out of the
assets of the relevant Series of the Trust to the Shareholder of record at such
time and in the manner, not inconsistent with the 1940 Act or other applicable
laws, as may be specified from time to time in the Trust's then effective
registration statement under the Securities Act of 1933, subject to the
provisions of Section 6.4 hereof.
Section 6.4. Effect of Suspension of Determination of Net Asset Value.
If, pursuant to Section 6.9 hereof, the Trustees shall declare a
suspension of the determination of net asset value, the rights of Shareholders
(including those who shall have applied for redemption pursuant to Section 6.1
hereof but who shall not yet have received payment) to have Shares redeemed and
paid for by the Trust shall be suspended until the termination of such
suspension is declared. Any record holder who shall have his redemption right so
suspended may, during the period of such suspension, by appropriate written
notice of revocation at the office or agency where application was made, revoke
any application for redemption not honored and withdraw any certificates on
deposit. The redemption price of Shares for which redemption applications have
not been revoked shall be the net asset value ^ of such Shares next determined
as set forth in Section 7.1 after the termination of such suspension, and
payment shall be made within seven (7) days after the date upon which the
application was made plus the period after such application during which the
determination of net asset value was suspended.
Section 6.5. Repurchase by Agreement.
The Trust may repurchase Shares directly, or through the Distributor or
another agent designated for the purpose, by agreement with the owner thereof at
a price not exceeding the net asset value per ^ Share determined as of the time
when the purchase or contract of purchase is made or the net asset value as of
any time which may be later determined pursuant to Section 7.1 hereof, provided
payment is not made for the Shares prior to the time as of which such net asset
value is determined.
Section 6.6. Redemption of Shareholder's Interest.
The Trust shall have the right at any time without prior notice to the
^ Shareholder to redeem Shares of any ^ Shareholder for their then current net
asset value per Share if
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<PAGE>
(a) at such time the ^ Shareholder owns Shares having an aggregate net
asset value of less than an amount set from time to time by the Trustees subject
to such terms and conditions as the Trustees may approve, and subject to the
Trust's giving general notice to all ^ Shareholders of its intention to avail
itself of such right, either by publication in the Trust's registration
statement, if any, or by such other means as the Trustees may determine, or
(b) The Trustees believe that it is in the best interest of the Trust
to do so because of prior involvement by the Shareholder in fraudulent acts
relating to securities transactions.
Section 6.7. Redemption of Shares in Order to Qualify as Regulated
Investment Company; Disclosure of Holding.
If the Trustees shall, at any time and in good faith, be of the opinion
that direct or indirect ownership of Shares or other securities of the Trust has
or may become concentrated in any Person to an extent which would disqualify any
Series of the Trust as a regulated investment company under the Internal Revenue
Code, then the Trustees shall have the power by lot or other means deemed
equitable by them (i) to call for redemption by any such Person a number, or
principal amount, of Shares or other securities of the Trust sufficient to
maintain or bring the direct or indirect ownership of Shares or other securities
of the Trust into conformity with the requirements for such qualification and
(ii) to refuse to transfer or issue Shares or other securities of the Trust to
any Person whose acquisition of the Shares or other securities of the Trust in
question would result in such disqualification. The redemption shall be effected
at the redemption price and in the manner provided in Section 6.1.
The holders of Shares or other securities of the Trust shall upon
demand disclose to the Trustees in writing such information with respect to
direct and indirect ownership of Shares or other securities of the Trust as the
Trustees deem necessary to comply with the provisions of the Internal Revenue
Code, or to comply with the requirements of any other taxing authority.
Section 6.8. Reductions in Number of Outstanding Shares Pursuant to Net
Asset Value Formula.
The Trust may also reduce the number of Outstanding Shares pursuant to
the provisions of Section 7.3.
Section 6.9. Suspension of Right of Redemption.
The Trust may declare a suspension of the right of redemption or
postpone the date of payment or redemption for the whole or any part of any
period (i) during which the New York Stock Exchange is closed other than
customary week-end and holiday closings, (ii) during which trading on the New
York Stock Exchange is restricted, (iii) during which an emergency exists as a
result of which disposal by the Trust of securities owned by it is not
reasonably practicable or it is not reasonably practicable for the Trust fairly
to determine the value of its net assets, or (iv) during any other period when
the Commission may for the protection of Shareholders of the Trust by order
permit suspension of the right of redemption or postponement of the date of
payment or redemption; provided that applicable rules and regulations of the
Commission shall govern as to whether the conditions prescribed in (ii), (iii),
or (iv) exist. Such suspension shall take effect at such time as the Trust shall
specify but not later than the close of business on the business day next
following the declaration of suspension, and thereafter there shall be no right
of redemption or payment on redemption until the Trust shall declare the
suspension at an end, except that the
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<PAGE>
suspension shall terminate in any event on the first day on which said stock
exchange shall have reopened or the period specified in (ii) or (iii) shall have
expired (as to which in the absence of an official ruling by the Commission, the
determination of the Trust shall be conclusive). In the case of a suspension of
the right of redemption, a Shareholder may either withdraw his request for
redemption or receive payment based on the net asset value existing after the
termination of the suspension.
ARTICLE VII
DETERMINATION OF NET ASSET VALUE,
NET INCOME AND DISTRIBUTIONS
Section 7.1. ^ Net Asset Value.
The value of the assets of the Trust or any Series of the Trust shall
be determined by appraisal of the securities of the Trust or allocated to such
Series, such appraisal to be on the basis of ^ such method as shall be deemed to
reflect the fair value thereof, determined in good faith by or under the
direction of the Trustees. From the total value of said assets, there shall be
deducted all indebtedness, interest, taxes, payable or accrued, including
estimated taxes on unrealized book profits, expenses and management charges
accrued to the appraisal date, net income determined and declared as a
distribution and all other items in the nature of liabilities attributable to
the Trust or such Series or Class thereof which shall be deemed appropriate. The
net asset value of a Share shall be determined by dividing the net asset value
of the Class, or, if no Class has been established, of the Series, or, if no
Series has been established, of the Trust, by the number of Shares of that
Class, or Series, or of the Trust, as applicable, outstanding. The net asset
value of Shares of the Trust or any Class or Series of the Trust shall be
determined pursuant to the procedure and methods prescribed or approved by the
Trustees in their discretion and as set forth in the most recent Registration
Statement of the Trust as filed with the Securities and Exchange Commission
pursuant to the requirements of the Securities Act of 1933, as amended, the ^
1940 Act, as amended, and the Rules thereunder. The net asset value of the
Shares shall be determined at least once on each business day, as of the close
of trading on the New York Stock Exchange or as of such other time or times as
the Trustees shall determine. The power and duty to make the daily calculations
may be delegated by the Trustees to the Investment Adviser, the Custodian, the
Transfer Agent or such other Person as the Trustees may determine by resolution
or by approving a contract which delegates such duty to another Person. The
Trustees may suspend the daily determination of net asset value to the extent
permitted by the 1940 Act.
Section 7.2. Distributions to Shareholders.
The Trustees shall from time to time distribute ratably among the
Shareholders of the Trust or a Series such proportion of the net profits,
surplus (including paid-in surplus), capital, or assets of the Trust or such
Series held by the Trustees as they may deem proper. Such distributions may be
made in cash or property (including without limitation any type of obligations
of the Trust or such Series or any assets thereof), and the Trustees may
distribute ratably among the Shareholders additional Shares of the Trust or such
Series issuable hereunder in such manner, at such times, and on such terms as
the Trustees may deem proper. Such distributions may be among the Shareholders
of record at the time of declaring a distribution or among the Shareholders of
record at such other date or time or dates or times as the Trustees shall
determine. The Trustees may in their discretion determine that, solely for the
purposes of such distributions, Outstanding Shares shall exclude Shares for
which orders have been placed subsequent to a specified time on the date the
distribution is declared or on the next preceding day
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<PAGE>
if the distribution is declared as of a day on which Boston banks are not open
for business, all as described in the registration statement under the
Securities Act of 1933. 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
the Series or to meet obligations of the Trust or the Series, 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. The Trustees may adopt and offer to
Shareholders such dividend reinvestment plans, cash dividend payout plans or
related plans as the Trustees shall deem appropriate. The above provisions may
be modified to the extent required by a plan adopted by the Trustees to
establish Classes of Shares of the Trust or of a Series.
Inasmuch as the computation of net income and gains for Federal income
tax purposes may vary from the computation thereof on the books, the above
provisions shall be interpreted to give the Trustees the power in their
discretion to distribute for any fiscal year as ordinary dividends and as
capital gains distributions, respectively, additional amounts sufficient to
enable the Trust or the Series to avoid or reduce liability for taxes.
Section 7.3. Determination of Net Income; Constant Net Asset Value;
Reduction of Outstanding Shares.
Subject to Section 5.11 and Section 5.13 hereof, the net income of the
Trust or any Series shall be determined in such manner as the Trustees shall
provide by resolution. Expenses of the Trust or a Series, including the advisory
or management fee, shall be accrued each day. Such net income may be determined
by or under the direction of the Trustees as of the close of trading on the New
York Stock Exchange on each day on which such Exchange is open or as of such
other time or times as the Trustees shall determine, and, except as provided
herein, all the net income of the Trust or any Series, as so determined, may be
declared as a dividend on the Outstanding Shares of the Trust or such Series.
If, for any reason, the net income of the Trust or any Series, determined at any
time is a negative amount, the Trustees shall have the power with respect to the
Trust or such Series (i) to offset each Shareholder's pro rata share of such
negative amount from the accrued dividend account of such Shareholder, or (ii)
to reduce the number of Outstanding Shares of the Trust or such Series by
reducing the number of Shares in the account of such Shareholder by that number
of full and fractional Shares which represents the amount of such excess
negative net income, or (iii) to cause to be recorded on the books of the Trust
or such Series an asset account in the amount of such negative net income, which
account may be reduced by the amount, provided that the same shall thereupon
become the property of the Trust or such Series with respect to the Trust or
such Series and shall not be paid to any Shareholder, of dividends declared
thereafter upon the Outstanding Shares of the Trust or such Series on the day
such negative net income is experienced, until such asset account is reduced to
zero; or (iv) to combine the methods described in clauses (i) and (ii) and (iii)
of this sentence, in order to cause the net asset value per Share of the Trust
or such Series to remain at a constant amount per Outstanding Share immediately
after each such determination and declaration. The Trustees shall also have the
power to fail to declare a dividend out of net income for the purpose of causing
the net asset value per Share to be increased to a constant amount. The Trustees
shall not be required to adopt, but may at any time adopt, discontinue or amend
the practice of maintaining the net asset value per Share of the Trust or a
Series at a constant amount.
Section 7.4. Allocation Between Principal and Income.
The Trustees shall have full discretion to determine whether any cash
or property received shall be treated as income or as principal and whether any
item of expense shall be charged to the income or the principal ^ amount, and
their determination made in good faith shall be conclusive
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<PAGE>
upon the Shareholders. In the case of stock dividends received, the Trustees
shall have full discretion to determine, in the light of the particular
circumstances, how much if any of the value thereof shall be treated as income,
the balance, if any, to be treated as principal.
Section 7.5. Power to Modify Foregoing Procedures.
Notwithstanding any of the foregoing provisions of this Article VII,
the Trustees may prescribe, in their absolute discretion, such other bases and
times for determining the per Share net asset value or net income, or the
declaration and payment of dividends and distributions as they may deem
necessary or desirable.
ARTICLE VIII
DURATION; TERMINATION OF TRUST;
AMENDMENT; MERGERS, ETC.
Section 8.1. ^ Duration.
The Trust shall continue without limitation of time but subject to the
provisions of this Article VIII.
Section 8.2. Termination of Trust.
(a) The Trust or any Series of the Trust may be terminated by an
instrument in writing signed by a majority of the Trustees, or by the
affirmative vote of the holders of a majority of the Shares of the Trust or
Series outstanding and entitled to vote^ at any meeting of Shareholders. Upon
the termination of the Trust or any Series,
(i) the Trust or any Series 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 or Series and all of the powers of the Trustees under this
Declaration shall continue until the affairs of the Trust or Series
shall have been wound up, including the power to fulfill or discharge
the contracts of the Trust or Series, collect its assets, sell, convey,
assign, exchange, transfer or otherwise dispose of all or any part of
the remaining Trust Property or property of the Series 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; and
(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 property of the
Series, in cash or in kind or partly each, among the Shareholders of
the Trust or Series according to their respective rights.
(b) After termination of the Trust or any Series and distribution to
the Shareholders 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, and the Trustees shall thereupon be discharged
from all further liabilities and duties hereunder, and the rights and interests
of all Shareholders of the Trust or Series shall thereupon cease.
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<PAGE>
Section 8.3. Amendment Procedure.
(a) This Declaration may be amended by a vote of the holders of a
majority of the Shares outstanding and entitled to vote. Amendments shall be
effective upon the taking of action as provided in this section or at such later
time as shall be specified in the applicable vote or instrument. The Trustees
may also amend this Declaration without the vote or consent of Shareholders if
they deem it necessary to conform this Declaration to the requirements of
applicable federal or state laws or regulations or the requirements of the
regulated investment company provisions of the Internal Revenue Code (including
those provisions of such Code relating to the retention of the exemption from
federal income tax with respect to dividends paid by the Trust out of interest
income received on Municipal Bonds), 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 Shareholders if they deem it necessary or desirable 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 make any other
changes in the Declaration which do not materially adversely affect the rights
of Shareholders hereunder.
(b) No amendment may be made under this Section 8.3 which would change
any rights with respect to any Shares of the Trust or Series by reducing the
amount payable thereon upon liquidation of the Trust or Series or by diminishing
or eliminating any voting rights pertaining thereto, except with the vote or
consent of the holders of two-thirds of the Shares of the Trust or Series
outstanding and entitled to vote. Nothing contained in this Declaration shall
permit the amendment of this Declaration to impair the exemption from personal
liability of the Shareholders, Trustees, officers, employees and agents of the
Trust or to permit assessments upon Shareholders.
(c) A certificate signed by a majority of the Trustees setting forth
an amendment and reciting that it was duly adopted by the Shareholders or by the
Trustees as aforesaid or a copy of the Declaration, as amended, and executed by
a majority of the Trustees, shall be conclusive evidence of such amendment when
lodged among the records of the Trust.
Notwithstanding any other provision hereof, until such time as a
Registration Statement under the Securities Act of 1933, as amended, covering
the first public offering of securities of the Trust shall have become
effective, 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.
Section 8.4. 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 the property of any
Series, including its good will, upon such terms and conditions and for such
consideration when and as authorized ^ by an instrument in writing signed by a
majority of the Trustees.3
___________________
3 Adoption of this amended and restated Section requires the affirmative vote
of two thirds of the shares of the Trust outstanding and entitled to vote.
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<PAGE>
Section 8.5. ^ Incorporation.
^ When authorized by an instrument in writing signed by a majority of
the Trustees,4 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 the property of any Series or to carry on any business in
which the Trust or the Series shall directly or indirectly have any interest,
and to sell, convey and transfer the Trust Property or the property of any
Series to any such corporation, trust, association or organization in exchange
for the Shares or securities thereof or otherwise, and to lend money to,
subscribe for the Shares or securities 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 the Series holds or is about to acquire shares or any other interest. The
Trustees may also cause a merger or consolidation between the Trust or any
Series or any successor 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 Shareholders 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 to such organization or entities.
ARTICLE IX
REPORTS TO SHAREHOLDERS
^ The Trustees shall at least semi-annually submit to the Shareholders
a written financial report, which may be included in the Trust's prospectus or
statement of additional information, of the transactions of the Trust, including
financial statements which shall at least annually be certified by independent
public accountants.
ARTICLE X
MISCELLANEOUS
Section 10.1. ^ Filing.
This Declaration and any amendment hereto shall be filed in the office
of the Secretary of the Commonwealth of Massachusetts and in such other places
as may be required under the laws of the Commonwealth of Massachusetts and may
also be filed or recorded in such other places as the Trustees deem appropriate.
Unless the amendment is embodied in an instrument signed by a majority of the
Trustees, each amendment filed shall be accompanied by a certificate signed and
acknowledged by a Trustee stating that such action was duly taken in a manner
provided herein. A restated Declaration, integrating into a single instrument
all of the provisions of the Declaration which are then in effect and operative,
may be executed from time to time by a majority of the Trustees and shall, upon
filing with the Secretary of the Commonwealth of Massachusetts, be conclusive
evidence of all amendments contained therein and may hereafter be referred to in
lieu of the original Declaration and the various amendments thereto. The
restated Declaration may
_________________________
4 Adoption of this amended and restated Section requires the affirmative vote
of two thirds of the shares of the Trust outstanding and entitled to vote.
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<PAGE>
include any amendment which the Trustees are empowered to adopt, whether or not
such amendment has been adopted prior to the execution of the restated
Declaration.
Section 10.2. Governing Law.
This Declaration is executed by the Trustees and delivered in the
Commonwealth of Massachusetts and with reference to the internal 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 internal
laws of said State without regard to the choice of law rules thereof.
Section 10.3. 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.
Section 10.4. Reliance by Third Parties.
Any certificate executed by an individual who, according to the records
of the Trust appears to be a Trustee hereunder, certifying to: (a) the number or
identity of Trustees or Shareholders, (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 Shareholders, (d) the fact that the number of Trustees or
Shareholders 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.
Section 10.5. Provisions in Conflict with Law or Regulations.
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, the regulated investment company provisions of the
Internal Revenue Code or with other applicable laws and regulations, the
conflicting provision shall be deemed never to have constituted a part of this
Declaration; 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.
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 provisions in any other jurisdiction or any other provision of this
Declaration in any ^ jurisdiction.
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<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this instrument this
^_______ day of _______________, 1997.
^-----------------------------------
as Trustee and not Individually
^-----------------------------------
as Trustee and not Individually
^-----------------------------------
as Trustee and not Individually
------------------------------------
as Trustee and not Individually
------------------------------------
as Trustee and not Individually
THE COMMONWEALTH OF MASSACHUSETTS
County of Suffolk ^_____________ ____, 1997
Then personally appeared the above-named ^___________________ who
acknowledged the foregoing instrument to be ^ his/her free act and deed.
Before me,
^------------------------------
Notary Public
My commission expires: __________
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<PAGE>
SCUDDER GNMA FUND
AMENDED AND RESTATED DECLARATION OF TRUST
DATED ___________________, 1997 ^
Unless otherwise indicated, with respect to particular provisions, the adoption
of the Amended and Restated Declaration of Trust requires an affirmative vote of
a majority of the outstanding voting securities of the Trust as defined in the
Investment Company Act of 1940, as amended.
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I.....................................................................1^
Section 1.1. Name....................................................1
Section 1.2. Definitions.............................................1
ARTICLE II....................................................................3^
Section 2.1. General Powers..........................................3
Section 2.2. Investments.............................................3
Section 2.3. Legal Title.............................................5
Section 2.4. Issuance and Repurchase of Shares.......................5
Section 2.5. Delegation; Committees..................................5
Section 2.6. Collection and Payment..................................5
Section 2.7. Expenses................................................6
Section 2.8. Manner of Acting; By-laws...............................6
Section 2.9. Miscellaneous Powers....................................6
Section 2.10. Principal Transactions.................................7
Section 2.11. Number of Trustees.....................................7
Section 2.12. Election and Term......................................7
Section 2.13. Resignation and Removal................................7
Section 2.14. Vacancies..............................................8
Section 2.15. Delegation of Power to Other Trustees..................8
Section 2.16. Shareholder Vote, etc..................................8
ARTICLE III...................................................................8^
Section 3.1. Distribution Contract...................................8
Section 3.2. Advisory or Management Contract.........................9
Section 3.3. Affiliations of Trustees or Officers, Etc...............9
Section 3.4. Compliance with 1940 Act................................9
ARTICLE IV...................................................................10^
Section 4.1. No Personal Liability of Shareholders, Trustees, Etc...10
Section 4.2. Non-Liability of Trustees, Etc.........................10
Section 4.3. Mandatory Indemnification..............................10
Section 4.4. No Bond Required of Trustees...........................12
Section 4.5. No Duty of Investigation; Notice in Trust
Instruments, Etc.....................................12
Section 4.6. Reliance on Experts, Etc...............................12
ARTICLE V....................................................................13^
Section 5.1. Beneficial Interest....................................13
Section 5.2. Rights of Shareholders.................................13
Section 5.3. Trust Only.............................................13
Section 5.4. Issuance of Shares.....................................13
Section 5.5. Register of Shares.....................................14
Section 5.6. Transfer of Shares.....................................14
Section 5.7. Notices, Reports.......................................14
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<PAGE>
Section 5.8. Treasury Shares........................................15
Section 5.9. Voting Powers..........................................15
Section 5.10. Meetings of Shareholders..............................15
Section 5.11. Series Designation....................................15
Section 5.12. Assent to Declaration of Trust........................17
Section 5.13. Class Designation.....................................17
ARTICLE VI...................................................................18^
Section 6.1. Redemption of Shares...................................18
Section 6.2. Price. 18
Section 6.3. Payment................................................18
Section 6.4. Effect of Suspension of Determination of Net
Asset Value..........................................18
Section 6.5. Repurchase by Agreement................................19
Section 6.6. Redemption of Shareholder's Interest...................19
Section 6.7. Redemption of Shares in Order to Qualify as
Regulated Investment Company; Disclosure
of Holding...........................................19
Section 6.8. Reductions in Number of Outstanding Shares
Pursuant to Net Asset Value Formula..................20
Section 6.9. Suspension of Right of Redemption......................20
^ ARTICLE VII................................................................20
Section 7.1. Net Asset Value........................................20
Section 7.2. Distributions to Shareholders..........................21
Section 7.3. Determination of Net Income; Constant Net Asset
Value; Reduction of Outstanding Shares...............21
Section 7.4. Allocation Between Principal and Income................22
Section 7.5. Power to Modify Foregoing Procedures...................22
ARTICLE VIII.................................................................22^
Section 8.1. Duration...............................................22
Section 8.2. Termination of Trust...................................23
Section 8.3. Amendment Procedure....................................23
Section 8.4. Merger, Consolidation and Sale of Assets...............24
Section 8.5. Incorporation..........................................24
ARTICLE IX...................................................................25^
ARTICLE X....................................................................25^
Section 10.1. Filing................................................25
Section 10.2. Governing Law.........................................25
Section 10.3. Counterparts..........................................25
Section 10.4. Reliance by Third Parties.............................25
Section 10.5. Provisions in Conflict with Law
or Regulations....................................................26
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<PAGE>
AMENDED AND RESTATED DECLARATION OF TRUST
OF
SCUDDER GNMA FUND
DATED ^____________, 1997
AMENDED AND RESTATED DECLARATION OF TRUST made ^__________ ____, 1997,
by the undersigned Trustees;
WHEREAS, pursuant to a Declaration of Trust dated March ^ 24,1983, as
amended and restated, the Trustees^ established a Massachusetts business trust
for the investment and reinvestment of funds contributed thereto, the beneficial
interest in which is divided into transferable shares;^
WHEREAS, the Trustees desire to amend and restate said Declaration of
Trust in its entirety;
NOW, THEREFORE, the Trustees restate the Declaration of Trust as
follows:
^ ARTICLE I
NAME AND DEFINITIONS
Section 1.1. Name.
The name of the ^ Trust created hereby is the "Scudder GNMA Fund".
Section 1.2. Definitions.
Wherever they are used herein, the following terms have the following
respective meanings:
(a) "By-laws" means the By-laws referred to in Section 2.8 hereof, as
from time to time amended.
(b) ** 1 ^"Class" means the two or more Classes as may be established
and designated from time to time by the Trustees pursuant to Section 5.13
hereof.
(c) The term "Commission" has the meaning given it in the 1940 Act. The
term "Interested Person" has the meaning given it in the 1940 Act, as modified
by any applicable order or orders of the Commission. Except as otherwise defined
by the Trustees in conjunction with the establishment of any series of Shares,
the term "vote of a majority of the Shares outstanding and entitled to vote"
shall have the same meaning as the term "vote of a majority of the outstanding
voting securities" given it in the 1940 Act.
(d) "Custodian" means any Person other than the Trust who has custody
of any Trust Property as required by Section 17(f) of the 1940 Act, but does not
include a system for the central handling of securities described in said
Section 17(f).
(e) "Declaration" means this Amended and Restated Declaration of Trust
as further amended from time to time. Reference in this Declaration of Trust to
"Declaration," "hereof,"
<PAGE>
"herein," and "hereunder" shall be deemed to refer to this Declaration rather
than exclusively to the article or section in which such words appear.
(f) "Distributor" means the party, other than the Trust, to the
contract described in Section 3.1 ----------- hereof.
(g) "His" shall include the feminine and neuter, as well as the
masculine^ genders.
(h) "Investment Adviser" means the party, other than the Trust, to the
contract described in Section 3.2 hereof.
(i) "Municipal Bonds" means obligations issued by or on behalf of
states, territories of the United States and the District of Columbia and their
political subdivisions, agencies and instrumentalities, or other issuers, the
interest from which is exempt from regular Federal income tax.
(j) The "1940 Act" means the Investment Company Act of 1940, as amended
from time to time.
(k) "Person" means and includes individuals, corporations,
partnerships, trusts, associations, joint ventures and other entities, whether
or not legal entities, and governments and agencies and political subdivisions
thereof.
(l) "Series" individually or collectively means the two or more Series
as may be established and designated from time to time by the ^ Trustees
pursuant to Section 5.11 hereof. Unless the context otherwise requires, the term
^"Series" shall include Classes into which shares of the Trust, or of a Series,
may be divided from time to time.
(m) "Shareholder" means a record owner of Outstanding Shares.
(n) "Shares" means the equal proportionate units of interest into which
the beneficial interest in the Trust shall be divided from time to time,
including the Shares of any and all Series and Classes which may be established
by the Trustees and includes fractions of Shares as well as whole Shares.
^"Outstanding Shares" means those ^ Shares shown as of a time and from time to
time on the books of the Trust or its Transfer Agent as then issued and
outstanding, but shall not include Shares which have been redeemed or
repurchased by the Trust and which are at the time held in the Treasury of the
Trust.
(o) "Transfer Agent" means any one or more Persons other than the Trust
who maintains the Shareholder records of the Trust, such as the list of
Shareholders, the number of Shares credited to each account, and the like.
(p) The "Trust" means the Scudder GNMA Fund.
(q) The "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account of the
Trust or the Trustees.
(r) The "Trustees" means the person or persons who has or have signed
this Declaration, so long as he or they shall continue in office in accordance
with the terms hereof, and all other persons who may from time to time be duly
qualified and serving as Trustees in accordance with the provisions of Article
II hereof, and reference herein to a Trustee or the
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<PAGE>
Trustees shall refer to such person or persons in this capacity or their
capacities as trustees hereunder.
* 1 MOVED FROM HERE; TEXT NOT SHOWNARTICLE II
TRUSTEES
Section 2.1. General Powers.
The Trustees shall have exclusive and absolute control over the Trust
Property and over the business of the Trust 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 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
both within and 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
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 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.
Section 2.2. Investments.
The Trustees shall have the power:
(a) To operate as and carry on the business of an investment company,
and exercise all the powers necessary and appropriate to the conduct of such
operations.
(b) To invest in, hold for investment, or reinvest in, securities,
including shares of open-end investment companies; common and preferred stocks;
warrants; bonds, debentures, bills, time notes and all other evidences of
indebtedness; negotiable or non-negotiable instruments; government securities,
including securities of any state, municipality or other political subdivision
thereof, or any governmental or quasi-governmental agency or instrumentality;
and money market instruments including bank certificates of deposit, finance
paper, commercial paper, bankers acceptances and all kinds of repurchase
agreements, of any corporation, company, trust, association, firm or other
business organization however established, and of any country, state,
municipality or other political subdivision, or any governmental or
quasi-governmental agency or instrumentality.
(c) To acquire (by purchase, subscription or otherwise), to hold, to
trade in and deal in, to acquire any rights or options to purchase or sell, to
sell or otherwise dispose of, to lend, and to pledge any such securities and to
enter into repurchase agreements and forward foreign currency exchange
contracts, to purchase and sell futures contracts on securities^, securities
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<PAGE>
indices and foreign currencies, to purchase or sell options on such contracts,
foreign currency contracts, and foreign currencies and to engage in all types of
hedging and risk management transactions.
(d) To exercise all rights, powers and privileges of ownership or
interest in all securities, repurchase agreements, futures contracts and options
and other assets included in the Trust Property, including the right to vote
thereon and otherwise act with respect thereto and to do all acts for the
preservation, protection, improvement and enhancement in value of all such
assets.
(e) To acquire (by purchase, lease or otherwise) and to hold, use,
maintain, develop and dispose of (by sale or otherwise) any property, real or
personal, including cash, and any interest therein.
(f) To borrow money and in this connection issue notes or other
evidence of indebtedness; to secure borrowings by mortgaging, pledging or
otherwise subjecting as security the Trust Property; to endorse, guarantee, or
undertake the performance of any obligation or engagement of any other Person
and to lend Trust Property.
(g) To aid by further investment any corporation, company, trust,
association or firm, any obligation of or interest in which is included in the
Trust Property or in the affairs of which the Trustees have any direct or
indirect interest; to do all acts and things designed to protect, preserve,
improve or enhance the value of such obligation or interest, and to guarantee or
become surety on any or all of the contracts, stocks, bonds, notes, debentures
and other obligations of any such corporation, company, trust, association or
firm.
(h) To 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 the sale of Shares.
(i) To invest, through a transfer of cash, securities and other assets
or otherwise, all or a portion of the Trust Property, or to sell all or a
portion of the Trust Property and invest the proceeds of such sales, in another
investment company that is registered under the 1940 Act.1
(j) In general to carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything necessary, suitable
or proper for the accomplishment of any purpose or the attainment of any object
or the furtherance of any power hereinbefore set forth, either alone or in
association with others, and to do every other act or thing incidental or
appurtenant to or growing out of or connected with the aforesaid business or
purposes, objects or powers.
The foregoing clauses shall be construed both as objects and powers,
and the foregoing enumeration of specific powers shall not be held to limit or
restrict in any manner the general powers of the Trustees.
________________
1 Adoption of this Section requires the affirmative vote of two thirds of the
shares of the Trust outstanding and entitled to vote.
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<PAGE>
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.
Section 2.3. Legal Title.
Legal title to all the Trust Property, including the property of any
Series of the Trust, shall be vested in the Trustees as joint tenants except
that the Trustees shall have power to cause legal title to any Trust Property to
be held by or in the name of one or more of the Trustees, or in the name of the
Trust, or in the name of any other Person as nominee, on such terms as the
Trustees may determine, provided that the interest of the Trust therein is^
deemed appropriately protected. The right, title and interest of the Trustees in
the Trust Property and the property of each Series of the Trust shall vest
automatically in each Person who may hereafter become a Trustee. Upon the
termination of the term of office, resignation, removal or death of a Trustee he
shall automatically cease to have any right, title or interest in any of the
Trust Property or the property of any Series of the Trust, and the right, title
and interest of such Trustee in the Trust Property shall vest automatically in
the remaining Trustees. Such vesting and cessation of title shall be effective
whether or not conveyancing documents have been executed and delivered.
Section 2.4. Issuance and Repurchase of Shares.
The Trustees shall have the power to issue, sell, repurchase, redeem,
retire, cancel, acquire, hold, resell, reissue, dispose of, transfer, and
otherwise deal in Shares and, subject to the provisions set forth in Articles VI
and VII and Section 5.11 hereof, to apply to any such repurchase, redemption,
retirement, cancellation or acquisition of Shares any funds or property of the
particular series of the Trust with respect to which such Shares are issued,
whether capital or surplus or otherwise, to the full extent now or hereafter
permitted by the laws of the Commonwealth of Massachusetts governing business
corporations.
Section 2.5. Delegation; Committees.
The Trustees shall have power 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
the names of the Trustees or otherwise as the Trustees may deem expedient, to
the same extent as such delegation is permitted by the 1940 Act.
Section 2.6. Collection and Payment.
The Trustees shall have power to collect all property due to the Trust;
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.
Section 2.7. Expenses.
The Trustees shall have the 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.
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<PAGE>
Section 2.8. 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 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 or repeal such By-laws to
the extent such power is not reserved to the Shareholders.
Notwithstanding the foregoing provisions of this Section 2.8 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.
Section 2.9. Miscellaneous Powers.
Subject to Section 5.11^ hereof, 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; (b) enter into joint ventures,
partnerships and any other combinations or associations; (c) remove Trustees or
fill vacancies in or add to their number, elect and remove such officers and
appoint and terminate such agents or employees as they consider appropriate, and
appoint from their own number, and terminate, any one or more committees which
may exercise some or all of the power and authority of the Trustees as the
Trustees may determine; (d) purchase, and pay for out of Trust Property,
insurance policies insuring the Shareholders, Trustees, officers, employees,
agents, investment advisers, distributors, selected dealers 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 constituting negligence, or whether or not the
Trust would have the power to indemnify such Person against such liability; (e)
establish pension, profit-sharing,^ share purchase, and other retirement,
incentive and benefit plans for any Trustees, officers, employees and agents of
the Trust; (f) to the extent permitted by law, indemnify any person with whom
the Trust has dealings, including the Investment Adviser, Distributor, Transfer
Agent and selected dealers, 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 and the method by which its accounts shall
be kept; and (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.
Section 2.10. Principal Transactions.
Except in transactions not permitted by the 1940 Act or rules and
regulations adopted by the Commission, the Trustees may, on behalf of the Trust,
buy any securities from or sell any securities to, or lend any assets of the
Trust to, any Trustee or officer of the Trust or any firm of which any such
Trustee or officer is a member acting as principal, or have any such dealings
with the Investment Adviser, Distributor or transfer agent or with any
Interested Person ^ or such Person; and the Trust may employ any such Person, or
firm or company in which such Person is
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<PAGE>
an Interested Person, as broker, dealer, legal counsel, registrar, transfer
agent, dividend disbursing agent or ^ Custodian upon customary terms.
Section 2.11. Number of Trustees.
The number of Trustees shall initially be one (1), and thereafter shall
be such number as shall be fixed from time to time by a written instrument
signed by a majority of the Trustees^.
Section 2.12. Election and Term.
Except for the Trustees named herein or appointed to fill vacancies
pursuant to Section 2.14 hereof, the Trustees shall be elected by the
Shareholders owning of record a plurality of the Shares voting at a meeting of
Shareholders. Such a meeting shall be held on a date fixed by the Trustees.
Except in the event of resignation or removals pursuant to Section 2.13 hereof,
each Trustee shall hold office until such time as less than a majority of the
Trustees holding office have been elected by Shareholders, and thereafter until
the holding of a Shareholders' meeting as required by the next following
sentence. In such event the Trustees then in office will call a Shareholders'
meeting for the election of Trustees. Except for the foregoing circumstances,
the Trustees shall continue to hold office and may appoint successor ^ Trustees.
Section 2.13. Resignation and Removal.
Any Trustee may resign his trust (without the need for any prior or
subsequent accounting) by an instrument in writing signed by him and delivered
to the other Trustees and such resignation shall be effective upon such
delivery, or at a later date according to the terms of the instrument. Any of
the Trustees may be removed (provided the aggregate number of Trustees after
such removal shall not be less than one) with cause, by the action of two-thirds
of the remaining Trustees. Any Trustee may be removed at any meeting of
Shareholders by vote of two-thirds of the Outstanding Shares. The Trustees shall
promptly call a meeting of the shareholders for the purpose of voting upon the
question of removal of any such Trustee or Trustees when requested in writing so
to do by the holders of not less than ten percent of the Outstanding Shares^
and, in that connection, the Trustees will assist shareholder communications to
the extent provided for in Section 16(c) under the 1940 Act. 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 or property of any series of the Trust held in the name of the
resigning or removed Trustee. Upon the incapacity or death of any Trustee, his
legal representative shall execute and deliver on his behalf such documents as
the remaining Trustees shall require as provided in the preceding sentence.
Section 2.14. Vacancies.
The term of office of a Trustee shall terminate and a vacancy shall
occur in the event of the death, 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, made by a written
instrument signed by a majority of the Trustees then in office. Any such
appointment shall not become effective, however, until the person named in the
written
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<PAGE>
instrument of appointment shall have accepted in writing such appointment and
agreed in writing to be bound by the terms of the Declaration. 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 2.14, 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.
Section 2.15. Delegation of Power to Other Trustees.
Any Trustee may, by power of attorney, delegate his power for a period
not exceeding six (6) months at any one time to any other Trustee or Trustees;
provided that in no case shall less than two (2) Trustees personally exercise
the powers granted to the Trustees under this Declaration except as herein
otherwise expressly provided.
Section 2.16. Shareholder Vote, etc. Not Required.
Except to the extent specifically provided to the contrary in this
Declaration, the Trustees may exercise each of the powers granted to them in
this Declaration without the vote, approval or agreement of the Shareholders,
unless such a vote, approval or agreement is required by the 1940 Act or
applicable laws of the Commonwealth of Massachusetts.
ARTICLE III
CONTRACTS
Section 3.1. Distribution Contract.
The Trustees may in their discretion from time to time enter into an
exclusive or non-exclusive underwriting contract or contracts providing for the
sale of the Shares at a price based on the net asset value of a Share, whereby
the Trustees may either agree to sell the Shares to the other party to the
contract or appoint such other party their sales agent for the Shares, and in
either case on such terms and conditions, if any, as may be prescribed in the
By-laws, and such further terms and conditions as the Trustees may in their
discretion determine not inconsistent with the provisions of this Article III or
of the By-laws^; and such contract may also provide for the repurchase of the
Shares by such other party as agent of the Trustees.
Section 3.2. Advisory or Management Contract.
The Trustees may in their discretion from time to time enter into an
investment advisory or management contract or separate advisory contracts with
respect to one or more Series whereby the other party to such contract shall
undertake to furnish to the Trust such management, investment advisory,
statistical and research facilities and services and such other facilities and
services, if any, and all upon such terms and conditions as the Trustees may in
their discretion determine, including the grant of authority to such other party
to determine what securities shall be purchased or sold by the Trust and what
portion of its assets shall be uninvested, which authority shall include the
power to make changes in the investments of the Trust or any Series.
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<PAGE>
The Trustees may also employ, or authorize the Investment Adviser to
employ, one or more sub-advisers from time to time to perform such of the acts
and services of the Investment Adviser and upon such terms and conditions as may
be agreed upon between the Investment Adviser and such sub-advisers and approved
by the Trustees. Any reference in this Declaration to the Investment Adviser
shall be deemed to include such sub-advisers unless the context otherwise
requires.
Section 3.3. Affiliations of Trustees or Officers, Etc.
The fact that:
(i) any of the Shareholders, Trustees or officers of the
Trust is a shareholder, director, officer, partner, trustee, employee,
manager, adviser or distributor of or for any partnership, corporation,
trust, association or other organization or of or for any parent or
affiliate of any organization, with which a contract of the character
described in Sections 3.1 or 3.2 above or for services as Custodian,
Transfer Agent, accounting agent or disbursing agent or for related
services may have been or may hereafter be made, or that any such
organization, or any parent or affiliate thereof, is a Shareholder of
or has an interest in the Trust, or that
(ii) any partnership, corporation, trust, association or
other organization with which a contract of the character described in
Sections 3.1 or 3.2 above or for services as Custodian, Transfer Agent,
accounting agent or disbursing agent or for related services may have
been or may hereafter be made also has any one or more of such
contracts with one or more other partnerships, corporations, trusts,
associations or other organizations, or has other business or
interests, shall not affect the validity of any such contract or
disqualify any Shareholder, Trustee or officer of the Trust from voting
upon or executing the same or create any liability or accountability to
the Trust or its Shareholders.
Section 3.4. Compliance with 1940 Act.
Any contract entered into pursuant to Sections 3.1 or 3.2 shall be
consistent with and subject to the requirements of Section 15 of the 1940 Act
(including any amendment thereof or other applicable act of Congress hereafter
enacted), as modified by any applicable order or orders of the Commission, with
respect to its continuance in effect, its termination and the method of
authorization and approval of such contract or renewal thereof.
ARTICLE IV
LIMITATIONS OF LIABILITY OF SHAREHOLDERS,
TRUSTEES AND OTHERS
Section 4.1. No Personal Liability of Shareholders, Trustees, Etc.
No Shareholder shall be subject to any personal liability whatsoever to
any Person in connection with Trust Property or the acts, obligations or affairs
of the Trust. No Trustee, officer, employee or agent of the Trust shall be
subject to any personal liability whatsoever to any Person, other than to the
Trust or its Shareholders, in connection with Trust Property or the affairs of
the Trust, save only that arising from bad faith, willful misfeasance, gross
negligence or reckless disregard of his duties with respect to such Person; and
all such Persons shall look solely to the Trust Property for satisfaction of
claims of any nature arising in connection with the affairs
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of the Trust. If any Shareholder, Trustee, officer, employee, or agent, as such,
of the Trust, is made a ^ part to any suit or proceeding to enforce any such
liability of the Trust, he shall not, on account thereof, be held to any
personal liability. The Trust shall indemnify and hold each Shareholder harmless
from and against all claims and liabilities, to which such Shareholder may
become subject by reason ^ for his being or having been a Shareholder, and shall
reimburse such Shareholder for all legal and other expenses reasonably incurred
by him in connection with any such claim or liability. The indemnification and
reimbursement required by the preceding sentence shall be made only out of the
assets of the one or more Series of which the Shareholder who is entitled to
indemnification or reimbursement was a Shareholder at the time the act or event
occurred which gave rise to the claim against or liability of said Shareholder.
The rights accruing to a Shareholder under this Section 4.1 shall not impair any
other right to which such Shareholder may be lawfully entitled, nor shall
anything herein contained restrict the right of the Trust to indemnify or
reimburse a Shareholder in any appropriate situation even though not
specifically provided herein.
Section 4.2. Non-Liability of Trustees, Etc.
No Trustee, officer, employee or agent of the Trust shall be liable to
the Trust, its Shareholders, or to any Shareholder, 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 the duties involved in the conduct of his
office.
Section 4.3. Mandatory Indemnification.
(a) Subject to the exceptions and limitations contained in
paragraph (b) below:
(i) every person who is, or has been, a Trustee or officer of
the Trust shall be indemnified by the Trust 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, administrative 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 Shareholders by reason of a final adjudication by a court or other
body before which a proceeding was brought that he engaged in 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;
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(iii) in the event of a settlement or other disposition not
involving a final adjudication as provided in paragraph (b)(i) or
(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; or
(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 Disinterested Trustees acting on the matter
(provided that a majority of the Disinterested Trustees then
in office act on the matter) or (y) written opinion of
independent legal counsel.
(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 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 4.3 may be advanced by the Trust 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 4.3, provided that either:
(i) such undertaking is secured by a surety bond or some
other appropriate security provided by the recipient, or the Trust
shall be insured against losses arising out of any such advances; or
(ii) a majority of the Disinterested Trustees acting on the
matter (provided that a majority of the Disinterested 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 4.3, a "Disinterested Trustee" is one
who is not (i) 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), or (ii) involved in the claim,
action, suit or ^ proceeding.
Section 4.4. No Bond Required of Trustees.
No Trustee shall be obligated to give any bond or other security for
the performance of any of his duties hereunder.
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Section 4.5. No Duty of Investigation; Notice in Trust Instruments,
Etc.
No purchaser, lender, transfer agent or other Person dealing with the
Trustees or any officer, employee or agent of the Trust 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, Share, other security of the Trust or
undertaking, and every other act or thing whatsoever executed in connection with
the Trust shall be conclusively presumed to have been executed or done by the
executors thereof only in their capacity as Trustees under this Declaration or
in their capacity as officers, employees or agents of the Trust. Every written
obligation, contract, instrument, certificate, Share, other security of the
Trust or undertaking made or issued by the Trustees may recite that the same is
executed or made by them not individually, but as Trustees under the
Declaration, and that the obligations of the Trust under any such instrument are
not binding upon any of the Trustees or Shareholders individually, but bind only
the trust estate, and may contain any further recital which they or he may deem
appropriate, but the omission of such recital shall not operate to bind the
Trustees individually. The Trustees shall at all times maintain insurance for
the protection of the Trust Property, its Shareholders, 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.
Section 4.6. Reliance on Experts, Etc.
Each Trustee and officer or employee of the Trust shall, in the
performance of his duties, be fully and completely justified and protected with
regard to any act or any failure to act resulting from reliance in good faith
upon the books of account or other records of the Trust, upon an opinion of
counsel, or upon reports made to the Trust by any of its officers or employees
or by the Investment Adviser, the Distributor, Transfer Agent, selected dealers,
accountants, appraisers 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 V
SHARES OF BENEFICIAL INTEREST
Section 5.1. Beneficial Interest.
The interest of the beneficiaries hereunder shall be divided into
transferable Shares of beneficial interest, all of one class, except as provided
in Section 5.11 and Section 5.13 hereof, par value $.01 per share. The number of
Shares of beneficial interest authorized hereunder is unlimited. All Shares
issued hereunder including, without limitation, Shares issued in connection with
a dividend in Shares or a split of Shares, shall be fully paid and
non-assessable.
Section 5.2. Rights of Shareholders.
The ownership of the Trust Property and the property of each Series of
the Trust of every description and the right to conduct any business ^
herein-before described are vested exclusively in the Trustees, and the
Shareholders shall have no interest therein other than the beneficial interest
conferred by their Shares, and they shall have no right to call for any
partition or division of any property, profits, rights or interests of the Trust
nor can they be called upon to share or
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assume any losses of the Trust or suffer an assessment of any kind by virtue of
their ownership of Shares. The Shares shall be personal property giving only the
rights specifically set forth in this Declaration. The Shares shall not entitle
the holder to preference, preemptive, appraisal, conversion or exchange rights,
except as the Trustees may determine with respect to any Series of Shares.
Section 5.3. Trust Only.
It is the intention of the Trustees to create only the relationship of
Trustee and beneficiary between the Trustees and each Shareholder from time to
time. It is not the intention of the Trustees to create a general partnership,
limited partnership, joint stock association, corporation, bailment or any form
of legal relationship other than a trust. Nothing in this Declaration ^ shall be
construed to make the Shareholders, either by themselves or with the Trustees,
partners or members of a joint stock association.
Section 5.4. Issuance of Shares.
The Trustees in their discretion may, from time to time without vote of
the Shareholders, issue Shares, in addition to the then issued and outstanding
Shares and Shares held in the treasury, 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 Shares, the Trustees may issue fractional Shares and Shares
held in the treasury. The Trustees may from time to time divide or combine the
Shares into a greater or lesser number without thereby changing the
proportionate beneficial interests in the Trust. Contributions to the Trust may
be accepted for, and Shares shall be redeemed as, whole Shares and/or 1/1,000ths
of a Share or integral multiples thereof.
Section 5.5. Register of Shares.
A register shall be kept at the principal office of the Trust or an
office of the Transfer Agent which shall contain the names and addresses of the
Shareholders and the number of Shares held by them respectively and a record of
all transfers thereof. Such register shall be conclusive as to who are the
holders of the Shares and who shall be entitled to receive dividends or
distributions or otherwise to exercise or enjoy the rights of Shareholders. No
Shareholder shall be entitled to receive payment of any dividend or
distribution, nor to have notice given to him as herein or in the By-laws
provided, until he has given his address to the Transfer Agent or such other
officer or agent of the Trustees as shall keep the said register for entry
thereon. ^ It is not contemplated that certificates will be issued for the
Shares; however, the Trustees, in their discretion, may authorize the issuance
of share certificates and promulgate appropriate rules and regulations as to
their use.
Section 5.6. Transfer of Shares.
Except as otherwise provided by the Trustees, shares shall be
transferable on the records of the Trust only by the record holder thereof or by
his agent thereunto duly authorized ^, upon delivery to the Trustees or the
Transfer Agent of a duly executed instrument of transfer, together with such
evidence of the genuineness of each such execution and authorization and of
other matters as may reasonably be required. Upon such delivery the transfer
shall be recorded on the register of the Trust. Until such record is made, the
Shareholder of record shall be deemed to be
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the holder of such Shares for all ^ purposes hereunder and neither the Trustees
nor any transfer agent or registrar nor any officer, employee or agent of the
Trust shall be affected by any notice of the proposed transfer.
Any person becoming entitled to any Shares in consequence of the death,
bankruptcy, or incompetence of any Shareholder, or otherwise by operation of
law, shall be recorded on the register of Shares as the holder of such Shares
upon production of the proper evidence thereof to the Trustees or the Transfer
Agent, but until such record is made, the Shareholder of record shall be deemed
to be the holder of such Shares for all purposes hereunder and neither the
Trustees nor any Transfer Agent or registrar nor any officer or agent of the
Trust shall be affected by any notice of such death, bankruptcy or incompetence,
or other operation of law.
Section 5.7. Notices, Reports.
Any and all notices to which any Shareholder may be entitled and any
and all communications shall be deemed duly served or given if mailed, postage
prepaid, addressed to any Shareholder of record at his last known address as
recorded on the register of the Trust. A notice of a meeting, an annual report
and any other communication to Shareholders need not be sent to a Shareholder
(i) if an annual report and a proxy statement for two consecutive shareholder
meetings have been mailed to such Shareholder's address and have been returned
as undeliverable, (ii) if all, and at least two, checks (if sent by first class
mail) in payment of dividends on Shares during a twelve-month period have been
mailed to such Shareholder's address and have been returned as undeliverable or
(iii) in any other case in which a proxy statement concerning a meeting of
security holders is not required to be given pursuant to the Commission's proxy
rules as from time to time in effect under the Securities Exchange Act of 1934.
However, delivery of such proxy statements, annual reports and other
communications shall resume if and when such Shareholder delivers or causes to
be delivered to the Trust written notice setting forth such Shareholder's then
current address.
Section 5.8. Treasury Shares.
Shares held in the treasury shall, until reissued pursuant to Section
5.4, not confer any voting rights on the Trustees, nor shall such Shares be
entitled to any dividends or other distributions declared with respect to the
Shares.
Section 5.9. Voting Powers.
The Shareholders shall have power to vote only (i) for the election of
Trustees as provided in Section 2.12; (ii) for the removal of Trustees as
provided in Section 2.13; (iii) with respect to any ^ amendment of this
Declaration to the extent and as provided in Section 8.3; ^(iv) to the same
extent as the stockholders of Massachusetts business corporation as to whether
or not a court action, proceeding or claim should or should not be brought or
maintained derivatively or as a class action on behalf of the Trust ^ or any
Series or Class thereof or the Shareholders ^(provided, however, that a
Shareholder of a particular Series or Class shall not be entitled to bring a
derivative or class action on behalf of any other Series or Class (or
Shareholder of any other Series or Class) of the Trust); and (v)2 with respect
to such additional matters relating to the Trust as may be required by this
Declaration, the By-laws or any registration of the
__________________
2 Adoption of this amended and restated Section requires the affirmative
vote of two thirds of the shares of the Trust outstanding and entitled
to vote.
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Trust as an investment company under the 1940 Act with the Commission (or any
successor agency) or as the Trustees may consider necessary or desirable. Each
whole Share shall be entitled to one vote as to any matter on which it is
entitled to vote and each fractional Share shall be entitled to bring a
proportionate fractional vote, except that the Trustees may, in conjunction with
the establishment of any Series or Class of Shares, establish or reserve the
right to establish conditions under which the several Series or Classes shall
have separate voting rights or^ no voting rights. There shall be no cumulative
voting in the election of Trustees. Until Shares are issued, the Trustees may
exercise all rights of Shareholders and may take any action required by law,
this Declaration or the By-laws to be taken by Shareholders. The By-laws may
include further provisions for ^ Shareholders' votes and meetings and related
matters.
Section 5.10. Meetings of Shareholders.
Meetings of Shareholders may be called at any time by the President,
and shall be called by the President and Secretary at the request in writing or
by resolution, of a majority of Trustees, or at the written request of the
holder or holders of ten percent (10%) or more of the total number of Shares
then issued and outstanding of the Trust entitled to vote at such meeting. Any
such request shall state the purpose of the proposed meeting.
Section 5.11. Series Designation.
The Trustees, in their discretion, may authorize the division of Shares
into two or more Series, and the different Series 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; provided,
that all Shares shall be identical except that there may be variations so fixed
and determined between different Series as to investment objective, purchase
price, allocation of expenses, right of redemption, special and relative rights
as to dividends and on liquidation, conversion rights, and conditions under
which the several Series shall have separate voting rights. All references to
Shares in this Declaration shall be deemed to be Shares of any or all ^ Series
as the context may require.
(a) ^ All provisions herein relating to the Trust shall apply equally
to each Series of the Trust except as the context requires otherwise.
(b) The number of authorized Shares and the number of Shares of each
Series that may be issued shall be unlimited. The Trustees may classify or
reclassify any unissued Shares or any Shares previously issued and reacquired of
any Series into one or more Series that may be established and designated from
time to time. The Trustees may hold as treasury Shares (of the same or some
other Series), reissue for such consideration and on such terms as they may
determine, or cancel any Shares of any Series reacquired by the Trust at their
discretion from time to time.
(c) All consideration received by the Trust for the issue or sale of
Shares of a particular Series, together with all assets in which such
consideration is invested or reinvested, all income, earnings, profits, and
proceeds thereof, including any proceeds derived from the sale, exchange or
liquidation of such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, shall
irrevocably belong to that Series for all purposes, subject only to the rights
of creditors of such Series and except as may otherwise be required by
applicable 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, the Trustees shall
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allocate them among any one or more of the Series 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 ^ Shareholders of all Series for all
purposes.
(d) The assets belonging to each particular Series shall be charged
with the liabilities of the Trust in respect of that Series and with all
expenses,^ costs, charges and reserves attributable to that Series, and any
general liabilities, expenses, costs, charges or reserves of the Trust which are
not readily identifiable as belonging to any particular Series shall be
allocated and charged by the Trustees to and among any one or more of the Series
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 Shareholders of all Series 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 Shareholders. The assets of
a particular Series of the Trust shall, under no circumstances, be charged with
liabilities attributable to any other Series of the Trust. All persons extending
credit to, or contracting with or having any claim against a particular Series
of the Trust shall look only to the assets of that particular Series for payment
of such credit, contract or claim. No Shareholder or former Shareholder of any
Series shall have any claim on or right to any assets allocated or belonging to
any other ^ Series.
(e) Each Share of a Series of the Trust shall represent a beneficial
interest in the net assets of such Series. Each holder of Shares of a Series
shall be entitled to receive his pro rata share of distributions of income and
capital gains made with respect to such Series, except as provided in Section
5.13 hereof. Upon redemption of his Shares or indemnification for liabilities
incurred by reason of his being or having been a Shareholder of a Series, such ^
Shareholder shall be paid solely out of the funds and property of such Series of
the Trust. Upon liquidation or termination of a Series of the Trust,
Shareholders of such Series shall be entitled to receive a pro rata share of the
net assets of such Series, except as provided in Section 5.13 hereof. A
Shareholder 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
Shareholders of any other Series of the Trust.
(f) The establishment and designation of any Series of Shares 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 as otherwise provided in such instrument. The
Trustees may by an instrument executed by a majority of their number abolish any
Series and the establishment and designation thereof. Except as otherwise
provided in this Article V, the Trustees shall have the power to determine the
designations, preferences, privileges, limitations and rights, of each class and
Series of Shares. Each instrument referred to in this paragraph shall have the
status of an amendment to this Declaration.
Section 5.12. Assent to Declaration of Trust.
Every Shareholder, by virtue of having become a shareholder, shall be
held to have expressly assented and agreed to the terms hereof and to have
become a party hereto.
Section 5.13. Class Designation.
The Trustees, in their discretion, may authorize the division of the
Shares of the Trust, or, if any Series be established, the Shares of any Series,
into two or more Classes, and the different
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Classes shall be established and designated, and the variations in the relative
rights and preferences as between the different Classes shall be fixed and
determined, by the Trustees; provided, that all Shares of the Trust or of any
Series shall be identical to all other Shares of the Trust or the same Series,
as the case may be, except that there may be variations between different ^
Classes as to allocation of expenses, right of redemption, special and relative
rights as to dividends and on liquidation, conversion rights, and conditions
under which the several Classes shall have separate voting rights. All
references to Shares in this Declaration shall be deemed to be Shares of any or
all Classes as the context may require.
If the Trustees shall divide the Shares of the Trust or any Series into two or
more Classes, the following provisions shall be applicable:
(a) All ^ provisions herein relating to the Trust, or any Series of
the Trust, shall apply equally to each Class of Shares of the Trust or of any
Series of the Trust, except as the context requires otherwise.
(b) The number of Shares of each Class that may be issued shall be
unlimited. The Trustees may classify or reclassify any ^ Shares or any Series of
any Shares into one or more Classes that may be established and designated from
time to time. The Trustees may hold as treasury Shares (of the same or some
other Class), reissue for such consideration and on such terms as they may
determine, or cancel any Shares of any Class reacquired by the Trust at their
discretion from time to time.
(c) Liabilities, expenses, costs, charges and reserves related to the
distribution of, and other identified expenses that should properly be allocated
to, the Shares of a particular Class may be charged to and borne solely by such
Class and the bearing of expenses solely by a Class of Shares may be
appropriately reflected (in a manner determined by the Trustees) and cause
differences in the net asset value attributable to, and the dividend, redemption
and liquidation rights of, the Shares of different ^ classes. Each allocation of
liabilities, expenses, costs, charges and reserves by the Trustees shall be
conclusive and binding upon the Shareholders of all Classes for all purposes.
(d) The establishment and designation of any Class of Shares 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 Class, or as otherwise provided in such
instrument. The Trustees may, by an instrument executed by a majority of their
number, abolish any Class and the establishment and designation thereof. Each
instrument referred to in this paragraph shall have the status of an amendment
to this Declaration.
ARTICLE VI
REDEMPTION AND REPURCHASE OF SHARES
Section 6.1...... Redemption of Shares.
All Shares of the Trust shall be redeemable, at the redemption price
determined in the manner set out in this Declaration. Redeemed or repurchased
Shares ^ may be resold by the Trust.
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The Trust shall redeem the Shares upon the appropriately verified
written application of the record holder thereof (or upon such other form of
request as the Trustees may determine) at such office or agency as may be
designated from time to time for that purpose in the Trust's then effective
registration statement under the Securities Act of 1933. The Trustees may from
time to time specify additional conditions, not inconsistent with the 1940 Act,
regarding the redemption of Shares in the Trust's then effective registration
statement under the Securities Act of 1933.
Section 6.2. Price.
Shares shall be redeemed at their net asset value, which may be reduced
by any redemption fee authorized by the Trustees, determined as set forth in
Section 7.1 hereof as of such time as the Trustees shall have theretofore
prescribed by resolution. In the absence of such resolution, the redemption
price of Shares deposited shall be the net asset value of such Shares next
determined as set forth in Section 7.1 hereof after receipt of such application.
Section 6.3. Payment.
Payment for such Shares shall be made in cash or in property out of the
assets of the relevant ^ Series of the Trust to the Shareholder of record at
such time and in the manner, not inconsistent with the 1940 Act or other
applicable laws, as may be specified from time to time in the Trust's then
effective registration statement under the Securities Act of 1933, subject to
the provisions of Section 6.4 hereof.
Section 6.4. Effect of Suspension of Determination of Net Asset
Value.
If, pursuant to Section 6.9 hereof, the Trustees shall declare a
suspension of the determination of net asset value, the rights of Shareholders
(including those who shall have applied for redemption pursuant to Section 6.1
hereof but who shall not yet have received payment) to have Shares redeemed and
paid for by the Trust shall be suspended until the termination of such
suspension is declared. Any record holder who shall have his redemption right so
suspended may, during the period of such suspension, by appropriate written
notice of revocation at the office or agency where application was made, revoke
any application for redemption not honored and withdraw any certificates on
deposit. The redemption price of Shares for which redemption applications have
not been revoked shall be the net asset value of such Shares next determined as
set forth in Section 7.1 after the termination of such suspension, and payment
shall be made within seven (7) days after the date upon which the application
was made plus the period after such application during which the determination
of net asset value was suspended.
Section 6.5. Repurchase by Agreement.
The Trust may repurchase Shares directly, or through the Distributor or
another agent designated for the purpose, by agreement with the owner thereof at
a price not exceeding the net asset value per ^ Share determined as of the time
when the purchase or contract of purchase is made or the net asset value as of
any time which may be later determined pursuant to Section 7.1 hereof, provided
payment is not made for the Shares prior to the time as of which such net asset
value is determined.
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Section 6.6. Redemption of Shareholder's Interest.
The Trust shall have the right at any time without prior notice to the
^ Shareholder to redeem Shares of any ^ Shareholder for their then current net
asset value per Share if
(a) at such time the ^ Shareholder owns Shares having an aggregate net
asset value of less than an amount set from time to time by the Trustees subject
to such terms and conditions as the Trustees may approve, and subject to the
Trust's giving general notice to all ^ Shareholders of its intention to avail
itself of such right, either by publication in the Trust's registration
statement, if any, or by such other means as the Trustees may determine, or
(b) The Trustees believe that it is in the best interest of the Trust
to do so because of prior involvement by the Shareholder in fraudulent acts
relating to securities transactions.
Section 6.7. Redemption of Shares in Order to Qualify as Regulated
Investment Company; Disclosure of Holding.
If the Trustees shall, at any time and in good faith, be of the opinion
that direct or indirect ownership of Shares or other securities of the Trust has
or may become concentrated in any Person to an extent which would disqualify any
Series of the Trust as a regulated investment company under the Internal Revenue
Code, then the Trustees shall have the power by lot or other means deemed
equitable by them (i) to call for redemption by any such Person a number, or
principal amount, of Shares or other securities of the Trust sufficient to
maintain or bring the direct or indirect ownership of Shares or other securities
of the Trust into conformity with the requirements for such qualification and
(ii) to refuse to transfer or issue Shares or other securities of the Trust to
any Person whose acquisition of the Shares or other securities of the Trust in
question would result in such disqualification. The redemption shall be effected
at the redemption price and in the manner provided in Section 6.1.
The holders of Shares or other securities of the Trust shall upon
demand disclose to the Trustees in writing such information with respect to
direct and indirect ownership of Shares or other securities of the Trust as the
Trustees deem necessary to comply with the provisions of the Internal Revenue
Code, or to comply with the requirements of any other taxing authority.
Section 6.8. Reductions in Number of Outstanding Shares Pursuant to
Net Asset Value Formula.
The Trust may also reduce the number of Outstanding Shares pursuant to
the provisions of Section 7.3.
Section 6.9. Suspension of Right of Redemption.
The Trust may declare a suspension of the right of redemption or
postpone the date of payment or redemption for the whole or any part of any
period (i) during which the New York Stock Exchange is closed other than
customary week-end and holiday closings, (ii) during which trading on the New
York Stock Exchange is restricted, (iii) during which an emergency exists as a
result of which disposal by the Trust of securities owned by it is not
reasonably practicable or it is not reasonably practicable for the Trust fairly
to determine the value of its net assets, or (iv) during any other period when
the Commission may for the protection of Shareholders of the Trust by order
permit suspension of the right of redemption or postponement of the date of
payment or
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redemption; provided that applicable rules and regulations of the Commission
shall govern as to whether the conditions prescribed in (ii), (iii), or (iv)
exist. Such suspension shall take effect at such time as the Trust shall specify
but not later than the close of business on the business day next following the
declaration of suspension, and thereafter there shall be no right of redemption
or payment on redemption until the Trust shall declare the suspension at an end,
except that the suspension shall terminate in any event on the first day on
which said stock exchange shall have reopened or the period specified in (ii) or
(iii) shall have expired (as to which in the absence of an official ruling by
the Commission, the determination of the Trust shall be conclusive). In the case
of a suspension of the right of redemption, a Shareholder may either withdraw
his request for redemption or receive payment based on the net asset value
existing after the termination of the suspension.
ARTICLE VII
DETERMINATION OF NET ASSET VALUE,
NET INCOME AND DISTRIBUTIONS
Section 7.1. Net Asset Value.
The value of the assets of the Trust or any Series of the Trust shall
be determined by appraisal of the securities of the Trust or allocated to such
Series, such appraisal to be on the basis of ^ such method as shall be deemed to
reflect the fair value thereof, determined in good faith by or under the
direction of the Trustees. From the total value of said assets, there shall be
deducted all indebtedness, interest, taxes, payable or accrued, including
estimated taxes on unrealized book profits, expenses and management charges
accrued to the appraisal date, net income determined and declared as a
distribution and all other items in the nature of liabilities attributable to
the Trust or such Series or Class thereof which shall be deemed appropriate. The
net asset value of a Share shall be determined by dividing the net asset value
of the Class, or, if no Class has been established, of the Series, or, if no
Series has been established, of the Trust, by the number of Shares of that
Class, or Series, or of the Trust, as applicable, outstanding. The net asset
value of Shares of the Trust or any Class or Series of the Trust shall be
determined pursuant to the procedure and methods prescribed or approved by the
Trustees in their discretion and as set forth in the most recent Registration
Statement of the Trust as filed with the Securities and Exchange Commission
pursuant to the requirements of the Securities Act of 1933, as amended, the ^
1940 Act, as amended, and the Rules thereunder. The net asset value of the
Shares shall be determined at least once on each business day, as of the close
of trading on the New York Stock Exchange or as of such other time or times as
the Trustees shall determine. The power and duty to make the daily calculations
may be delegated by the Trustees to the Investment Adviser, the Custodian, the
Transfer Agent or such other Person as the Trustees may determine by resolution
or by approving a contract which delegates such duty to another Person. The
Trustees may suspend the ^ daily determination of net asset value to the extent
permitted by the 1940 Act.
Section 7.2. Distributions to Shareholders.
The Trustees shall from time to time distribute ratably among the
Shareholders of the Trust or a Series such proportion of the net profits,
surplus (including paid-in surplus), capital, or assets of the Trust or such
Series held by the Trustees as they may deem proper. Such distributions may be
made in cash or property (including without limitation any type of obligations
of the Trust or such Series or any assets thereof), and the Trustees may
distribute ratably among the Shareholders additional Shares of the Trust or such
Series issuable hereunder in such manner, at such times, and on such terms as
the Trustees may deem proper. Such distributions may be
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among the Shareholders of record at the time of declaring a distribution or
among the Shareholders of record at such other date or time or dates or times as
the Trustees shall determine. The Trustees may in their discretion determine
that, solely for the purposes of such distributions, Outstanding Shares shall
exclude Shares for which orders have been placed subsequent to a specified time
on the date the distribution is declared or on the next preceding day if the
distribution is declared as of a day on which Boston banks are not open for
business, all as described in the registration statement under the Securities
Act of 1933. 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 the Series
or to meet obligations of the Trust or the Series, 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. The Trustees may adopt and offer to Shareholders
such dividend reinvestment plans, cash dividend payout plans or related plans as
the Trustees shall deem appropriate. The above provisions may be modified to the
extent required by a plan adopted by the Trustees to establish Classes of Shares
of the Trust or of a Series.
Inasmuch as the computation of net income and gains for Federal income
tax purposes may vary from the computation thereof on the books, the above
provisions shall be ^ interpreted to give the Trustees the power in their
discretion to distribute for any fiscal year as ordinary dividends and as
capital gains distributions, respectively, additional amounts sufficient to
enable the Trust or the Series to avoid or reduce liability for taxes.
Section 7.3. Determination of Net Income; Constant Net Asset Value;
Reduction of Outstanding Shares.
Subject to Section 5.11 and Section 5.13 hereof, the net income of the
Trust or any Series shall be determined in such manner as the Trustees shall
provide by resolution. Expenses of the Trust or a Series, including the advisory
or management fee, shall be accrued each day. Such net income may be determined
by or under the direction of the Trustees as of the close of trading on the New
York Stock Exchange on each day on which such Exchange is open or as of such
other time or times as the Trustees shall determine, and, except as provided
herein, all the net income of the Trust or any Series, as so determined, may be
declared as a dividend on the Outstanding Shares of the Trust or such Series.
If, for any reason, the net income of the Trust or any Series, determined at any
time is a negative amount, the Trustees shall have the power with respect to the
Trust or such Series (i) to offset each Shareholder's pro rata share of such
negative amount from the accrued dividend account of such Shareholder, or (ii)
to reduce the number of Outstanding Shares of the Trust or such Series by
reducing the number of Shares in the account of such Shareholder by that number
of full and fractional Shares which represents the amount of such excess
negative net income, or (iii) to cause to be recorded on the books of the Trust
or such Series an asset account in the amount of such negative net income, which
account may be reduced by the amount, provided that the same shall thereupon
become the property of the Trust or such Series with respect to the Trust or
such Series and shall not be paid to any Shareholder, of dividends declared
thereafter upon the Outstanding Shares of the Trust or such Series on the day
such negative net income is experienced, until such asset account is reduced to
zero; or (iv) to combine the methods described in clauses (i) and (ii) and (iii)
of this sentence, in order to cause the net asset value per Share of the Trust
or such Series to remain at a constant amount per Outstanding Share immediately
after each such determination and declaration. The Trustees shall also have the
power to fail to declare a dividend out of net income for the purpose of causing
the net asset value per Share to be increased to a constant amount. The Trustees
shall not be required to adopt, but may at any time adopt, discontinue or amend
the practice of maintaining the net asset value per Share of the Trust or a
Series at a constant amount.
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Section 7.4. Allocation Between Principal and Income.
The Trustees shall have full discretion to determine whether any cash
or property received shall be treated as income or as principal and whether any
item of expense shall be charged to the income or the principal ^ amount, and
their determination made in good faith shall be conclusive upon the
Shareholders. In the case of stock dividends received, the Trustees shall have
full discretion to determine, in the light of the particular circumstances, how
much if any of the value thereof shall be treated as income, the balance, if
any, to be treated as principal.
Section 7.5. Power to Modify Foregoing Procedures.
Notwithstanding any of the foregoing provisions of this Article VII,
the Trustees may prescribe, in their absolute discretion, such other bases and
times for determining the per Share net asset value or net income, or the
declaration and payment of dividends and distributions as they may deem
necessary or desirable.
ARTICLE VIII
DURATION; TERMINATION OF TRUST;
AMENDMENT; MERGERS, ETC.
Section 8.1. Duration.
The Trust shall continue without limitation of time but subject to the
provisions of this Article VIII.
Section 8.2. Termination of Trust.
(a) The Trust or any Series of the Trust may be terminated by an
instrument in writing signed by a majority of the Trustees, or by the
affirmative vote of the holders of a majority of the Shares of the Trust or
Series outstanding and entitled to vote^ at any meeting of Shareholders. Upon
the termination of the Trust or any Series,
(i) the Trust or any Series 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 or Series and all of the powers of the Trustees under this
Declaration shall continue until the affairs of the Trust or Series
shall have been wound up, including the power to fulfill or discharge
the contracts of the Trust or Series, collect its assets, sell, convey,
assign, exchange, transfer or otherwise dispose of all or any part of
the remaining Trust Property or property of the Series 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; and
(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 property of the
Series, in cash or in kind or partly each, among the Shareholders of
the Trust or Series according to their respective rights.
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<PAGE>
(b) After termination of the Trust or any Series and distribution to
the Shareholders 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, and the Trustees shall thereupon be discharged
from all further liabilities and duties hereunder, and the rights and interests
of all Shareholders of the Trust or Series shall thereupon cease.
Section 8.3. Amendment Procedure.
(a) This Declaration may be amended by a vote of the holders of a
majority of the Shares outstanding and entitled to vote. Amendments shall be
effective upon the taking of action as provided in this section or at such later
time as shall be specified in the applicable vote or instrument. The Trustees
may also amend this Declaration without the vote or consent of Shareholders if
they deem it necessary to conform this Declaration to the requirements of
applicable federal or state laws or regulations or the requirements of the
regulated investment company provisions of the Internal Revenue Code (including
those provisions of such Code relating to the retention of the exemption from
federal income tax with respect to dividends paid by the Trust out of interest
income received on Municipal Bonds), 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 Shareholders if they deem it necessary or desirable 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 make any other
changes in the Declaration which do not materially adversely affect the rights
of Shareholders hereunder.
(b) No amendment may be made under this Section 8.3 which would change
any rights with respect to any Shares of the Trust or Series by reducing the
amount payable thereon upon liquidation of the Trust or Series or by diminishing
or eliminating any voting rights pertaining thereto, except with the vote or
consent of the holders of two-thirds of the Shares of the Trust or Series
outstanding and entitled to vote. Nothing contained in this Declaration shall
permit the amendment of this Declaration to impair the exemption from personal
liability of the Shareholders, Trustees, officers, employees and agents of the
Trust or to permit assessments upon Shareholders.
(c) A certificate signed by a majority of the Trustees setting forth
an amendment and reciting that it was duly adopted by the Shareholders or by the
Trustees as aforesaid or a copy of the Declaration, as amended, and executed by
a majority of the ^ Trustees, shall be conclusive evidence of such amendment
when lodged among the records of the Trust.
Notwithstanding any other provision hereof, until such time as a ^
Registration Statement under the Securities Act of 1933, as amended, covering
the first public offering of securities of the Trust shall have become
effective, 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.
Section 8.4. 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 the property of any
Series, including its good will, upon such terms and
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<PAGE>
conditions and for such consideration when and as authorized ^ by an instrument
in writing signed by a majority of the Trustees.3
Section 8.5. ^ Incorporation.
^ When authorized by an instrument in writing signed by a majority of
the Trustees,4 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 the property of any Series or to carry on any business in
which the Trust or the Series shall directly or indirectly have any interest,
and to sell, convey and transfer the Trust Property or the property of any
Series to any such corporation, trust, association or organization in exchange
for the Shares or securities thereof or otherwise, and to lend money to,
subscribe for the Shares or securities 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 the Series holds or is about to acquire shares or any other interest. The
Trustees may also cause a merger or consolidation between the Trust or any
Series or any successor 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 Shareholders 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 to such organization or entities.
ARTICLE IX
REPORTS TO SHAREHOLDERS
The Trustees shall at least semi-annually submit to the Shareholders a
written financial report, which may be included in the Trust's prospectus or
statement of additional information, of the transactions of the Trust, including
financial statements which shall at least annually be certified by independent
public accountants.
ARTICLE X
MISCELLANEOUS
Section 10.1. Filing.
This Declaration and any amendment hereto shall be filed in the office
of the Secretary of the Commonwealth of Massachusetts and in such other places
as may be required under the laws of the Commonwealth of Massachusetts and may
also be filed or recorded in such other places as the Trustees deem appropriate.
Unless the amendment is embodied in an instrument signed by a majority of the
Trustees, each amendment filed shall be accompanied by a certificate signed and
acknowledged by a Trustee stating that such action was duly taken in a manner
provided herein.
____________________
3 Adoption of this amended and restated Section requires the affirmative
vote of two thirds of the shares of the Trust outstanding and entitled
to vote.
4 Adoption of this amended and restated Section requires the affirmative
vote of two thirds of the shares of the Trust outstanding and entitled
to vote.
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<PAGE>
A restated Declaration, integrating into a single instrument all of the
provisions of the Declaration which are then in effect and operative, may be
executed from time to time by a majority of the Trustees and shall, upon filing
with the Secretary of the Commonwealth of Massachusetts, be conclusive evidence
of all amendments contained therein and may hereafter be referred to in lieu of
the original Declaration and the various amendments thereto. The restated
Declaration may include any amendment which the Trustees are empowered to adopt,
whether or not such amendment has been adopted prior to the execution of the
restated Declaration.
Section 10.2. Governing Law.
This Declaration is executed by the Trustees and delivered in the
Commonwealth of Massachusetts and with reference to the internal 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 internal
laws of said State without regard to the choice of law rules thereof.
Section 10.3. 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.
Section 10.4. Reliance by Third Parties.
Any certificate executed by an individual who, according to the records
of the Trust appears to be a Trustee hereunder, certifying to: (a) the number or
identity of Trustees or Shareholders, (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 Shareholders, (d) the fact that the number of Trustees or
Shareholders 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.
Section 10.5. Provisions in Conflict with Law or Regulations.
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, the regulated investment company provisions of the
Internal Revenue Code or with other applicable laws and regulations, the
conflicting provision shall be deemed never to have constituted a part of this
Declaration; 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.
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 provisions in any other jurisdiction or any other provision of this
Declaration in any jurisdiction.
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<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this instrument this
^_______ day of _______________, 1997.
^------------------------------------
as Trustee and not Individually
------------------------------------
as Trustee and not Individually
------------------------------------
as Trustee and not Individually
------------------------------------
as Trustee and not Individually
------------------------------------
as Trustee and not Individually
THE COMMONWEALTH OF MASSACHUSETTS
County of Suffolk ^_____________ ____, 1997
Then personally appeared the above-named ^___________________ who
acknowledged the foregoing instrument to be ^ his/her free act and deed.
Before me,
------------------------------
Notary Public
My commission expires: __________^
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<PAGE>
SCUDDER INVESTMENT TRUST
AMENDED AND RESTATED DECLARATION OF TRUST
DATED ___________________, 1997 ^
Unless otherwise indicated, with respect to particular provisions, the adoption
of the Amended and Restated Declaration of Trust requires an affirmative vote of
a majority of the outstanding voting securities of the Trust as defined in the
Investment Company Act of 1940, as amended.
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I....................................................................1^
Section 1.1. Name....................................................1
Section 1.2. Definitions.............................................1
ARTICLE II...................................................................3^
Section 2.1. General Powers..........................................3
Section 2.2. Investments.............................................3
Section 2.3. Legal Title.............................................5
Section 2.4. Issuance and Repurchase of Shares.......................5
Section 2.5. Delegation; Committees..................................5
Section 2.6. Collection and Payment..................................5
Section 2.7. Expenses................................................6
Section 2.8. Manner of Acting; By-laws...............................6
Section 2.9. Miscellaneous Powers....................................6
Section 2.10. Principal Transactions.................................7
Section 2.11. Number of Trustees.....................................7
Section 2.12. Election and Term......................................7
Section 2.13. Resignation and Removal................................7
Section 2.14. Vacancies..............................................8
Section 2.15. Delegation of Power to Other Trustees ^................8
^ Section 2.16. Shareholder Vote, etc................................8
^ ARTICLE III.................................................................8
Section 3.1. Distribution Contract...................................8
Section 3.2. Advisory or Management Contract.........................9
Section 3.3. Affiliations of Trustees or Officers, Etc...............9
Section 3.4. ^ Compliance with 1940 Act ^............................9
^ ARTICLE IV.................................................................10
Section 4.1. No Personal Liability of Shareholders, Trustees, Etc...10
Section 4.2. ^ Non-Liability of Trustees, Etc ^.....................10
^ Section 4.3. Mandatory Indemnification............................10
Section 4.4. No Bond Required of Trustees...........................12
Section 4.5. No Duty of Investigation; Notice in Trust
Instruments, Etc.....................................12
Section 4.6. ^ Reliance on Experts, Etc ^...........................12
^ ARTICLE V..................................................................13
^ Section 5.1. Beneficial Interest..................................13
Section 5.2. Rights of Shareholders ^...............................13
Section 5.3. Trust Only.............................................13
Section 5.4. Issuance of Shares.....................................13
Section 5.5. Register of Shares.....................................14
Section 5.6. Transfer of Shares.....................................14
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<PAGE>
Section 5.7. Notices, Reports.......................................14
Section 5.8. Treasury Shares........................................15
Section 5.9. Voting Powers..........................................15
Section 5.10. Meetings of Shareholders..............................15
Section 5.11. Series Designation....................................15
Section 5.12. Assent to Declaration of Trust ^......................17
^ Section 5.13. Class Designation...................................17
ARTICLE VI...................................................................18
Section 6.1. Redemption of Shares...................................18
Section 6.2. Price. 18
Section 6.3. Payment................................................18
Section 6.4. Effect of Suspension of Determination of Net Asset
Value...................................18
Section 6.5. Repurchase by Agreement................................19
Section 6.6. Redemption of Shareholder's Interest...................19
Section 6.7. Redemption of Shares in Order to Qualify as
Regulated Investment Company; Disclosure of
Holding..............................................19
Section 6.8. Reductions in Number of Outstanding Shares
Pursuant to Net ^ Asset Value Formula................20
Section 6.9. Suspension of Right of Redemption ^....................20
^ ARTICLE VII................................................................20
^ Section 7.1. Net Asset Value......................................20
Section 7.2. Distributions to Shareholders..........................21
Section 7.3. Determination of Net Income; Constant Net Asset
Value; Reduction of Outstanding Shares...............21
Section 7.4. Allocation Between Principal and Income................22
Section 7.5. Power to Modify Foregoing Procedures ^.................22
^ ARTICLE VIII...............................................................22
^ Section 8.1. Duration.............................................22
Section 8.2. Termination of Trust...................................23
Section 8.3. Amendment Procedure....................................23
Section 8.4. Merger, Consolidation and Sale of Assets...............24
Section 8.5. Incorporation..........................................24
ARTICLE IX..................................................................25^
ARTICLE X...................................................................25^
Section 10.1. Filing................................................25
Section 10.2. Governing Law.........................................25
Section 10.3. Counterparts..........................................25
Section 10.4. Reliance by Third Parties.............................25
Section 10.5. Provisions in Conflict with Law or Regulations........26
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<PAGE>
AMENDED AND RESTATED DECLARATION OF TRUST
OF
SCUDDER INVESTMENT TRUST
DATED ^____________, 1997
AMENDED AND RESTATED DECLARATION OF TRUST made ^__________ ____, 1997,
by the undersigned Trustees;
WHEREAS, pursuant to a Declaration of Trust dated September 20, 1984,
as amended and restated, the Trustees^ established a Massachusetts business
trust for the investment and reinvestment of funds contributed thereto, the
beneficial interest in which is divided into transferable shares;^
WHEREAS, the Trustees desire to amend and restate said Declaration of
Trust in its entirety;
NOW, THEREFORE, the Trustees restate the Declaration of Trust as
follows:
ARTICLE I
NAME AND DEFINITIONS
^
Section 1.1. Name.
The name of the ^ Trust created hereby is the "Scudder Investment
Trust".
Section 1.2. Definitions.
Wherever they are used herein, the following terms have the following
respective meanings:
(a) "By-laws" means the By-laws referred to in Section 2.8 hereof, as
from time to time amended. -------
(b) ** 1 ^"Class" means the two or more Classes as may be established
and designated from time to time by the Trustees pursuant to Section 5.13
hereof.
(c) The term "Commission" has the meaning given it in the 1940 Act.
The term "Interested Person" has the meaning given it in the 1940 Act, as
modified by any applicable order or orders of the Commission. Except as
otherwise defined by the Trustees in conjunction with the establishment of any
series of Shares, the term "vote of a majority of the Shares outstanding and
entitled to vote" shall have the same meaning as the term ^"vote of a majority
of the outstanding voting securities" given it in the 1940 Act.
(d) "Custodian" means any Person other than the Trust who has custody
of any Trust Property as required by Section 17(f) of the 1940 Act, but does not
include a system for the central handling of securities described in said
Section 17(f).
(e) "Declaration" means this Amended and Restated Declaration of Trust
as further amended from time to time. Reference in this Declaration of Trust to
"Declaration,^" "hereof,"
<PAGE>
"herein," and "hereunder" shall be deemed to refer to this Declaration rather
than exclusively to the article or section in which such words appear.
(f) "Distributor" means the party, other than the Trust, to the
contract described in Section 3.1 ----------- hereof.
(g) "His" shall include the feminine and neuter, as well as the
masculine^ genders.
(h) "Investment Adviser" means the party, other than the Trust, to the
contract described in Section 3.2 hereof.
(i) "Municipal Bonds" means obligations issued by or on behalf of
states, territories of the United States and the District of Columbia and their
political subdivisions, agencies and instrumentalities, or other issuers, the
interest from which is exempt from regular Federal income tax.
(j) The "1940 Act" means the Investment Company Act of 1940, as
amended from time to time.
(k) "Person" means and includes individuals, corporations,
partnerships, trusts, associations, joint ventures and other entities, whether
or not legal entities, and governments and agencies and political subdivisions
thereof.
(l) "Series" individually or collectively means the two or more Series
as may be established and designated from time to time by the Trustees pursuant
to Section 5.11 hereof. Unless the context otherwise requires, the term
^"Series" shall include Classes into which shares of the Trust, or of a Series,
may be divided from time to time.
(m) "Shareholder" means a record owner of Outstanding Shares.
(n) "Shares" means the equal proportionate units of interest into
which the beneficial interest in the Trust shall be divided from time to time,
including the Shares of any and all Series and Classes which may be established
by the Trustees and includes fractions of Shares as well as whole Shares.
^"Outstanding Shares" means those ^ Shares shown as of a time and from time to
time on the books of the Trust or its Transfer Agent as then issued and
outstanding, but shall not include Shares which have been redeemed or
repurchased by the Trust and which are at the time held in the Treasury of the
Trust.
(o) "Transfer Agent" means any one or more Persons other than the
Trust who maintains the Shareholder records of the Trust, such as the list of
Shareholders, the number of Shares credited to each account, and the like.
(p) The "Trust" means the Scudder Investment Trust^
(q) The "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account of the
Trust or the Trustees.
(r) The "Trustees" means the person or persons who has or have signed
this Declaration, so long as he or they shall continue in office in accordance
with the terms hereof, and all other persons who may from time to time ^ be duly
qualified and serving as Trustees in accordance with the provisions of Article
II hereof, and reference herein to a Trustee or the
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<PAGE>
Trustees shall refer to such person or persons in this capacity or their
capacities as trustees hereunder.
* 1 MOVED FROM HERE; TEXT NOT SHOWNARTICLE II
TRUSTEES
Section 2.1. ^ General Powers.
^ The Trustees shall have exclusive and absolute control over the Trust
Property and over the business of the Trust 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 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
both within and 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
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 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.
Section 2.2. Investments.
The Trustees shall have the power:
(a) To operate as and carry on the business of an investment company,
and exercise all the powers necessary and appropriate to the conduct of such
operations.
(b) To invest in, hold for investment, or reinvest in, securities,
including shares of open-end investment companies; common and preferred stocks;
warrants; bonds, debentures, bills, time notes and all other evidences of
indebtedness; negotiable or non-negotiable instruments; government securities,
including securities of any state, municipality or other political subdivision
thereof, or any governmental or quasi-governmental agency or instrumentality;
and money market instruments including bank certificates of deposit, finance
paper, commercial paper, bankers acceptances and all kinds of repurchase
agreements, of any corporation, company, trust, association, firm or other
business organization however established, and of any country, state,
municipality or other political subdivision, or any governmental or
quasi-governmental agency or instrumentality.
(c) To acquire (by purchase, subscription or otherwise), to hold, to
trade in and deal in, to acquire any rights or options to purchase or sell, to
sell or otherwise dispose of, to lend, and to pledge any such securities and to
enter into repurchase agreements and forward foreign currency exchange
contracts, to purchase and sell futures contracts on securities, securities
indices
- 3 -
<PAGE>
and foreign currencies, to purchase or sell options on such contracts, foreign
currency contracts, and foreign currencies and to engage in all types of hedging
and risk management transactions.
(d) To exercise all rights, powers and privileges of ownership or
interest in all securities, repurchase agreements, futures contracts and options
and other assets included in the Trust Property, including the right to vote
thereon and otherwise act with respect thereto and to do all acts for the
preservation, protection, improvement and enhancement in value of all such
assets.
(e) To acquire (by purchase, lease or otherwise) and to hold, use,
maintain, develop and dispose of (by sale or otherwise) any property, real or
personal, including cash, and any interest therein.
(f) To borrow money and in this connection issue notes or other
evidence of indebtedness; to secure borrowings by mortgaging, pledging or
otherwise subjecting as security the Trust Property; to endorse, guarantee, or
undertake the performance of any obligation or engagement of any other Person
and to lend Trust Property.
(g) To aid by further investment any corporation, company, trust,
association or firm, any obligation of or interest in which is included in the
Trust Property or in the affairs of which the Trustees have any direct or
indirect interest; to do all acts and things designed to protect, preserve,
improve or enhance the value of such obligation or interest, and to guarantee or
become surety on any or all of the contracts, stocks, bonds, notes, debentures
and other obligations of any such corporation, company, trust, association or
firm.
(h) To 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 the sale of Shares.
(i) To invest, through a transfer of cash, securities and other assets
or otherwise, all or a portion of the Trust Property, or to sell all or a
portion of the Trust Property and invest the proceeds of such sales, in another
investment company that is registered under the 1940 Act.1
(j) In general to carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything necessary, suitable
or proper for the accomplishment of any purpose or the attainment of any object
or the furtherance of any power hereinbefore set forth, either alone or in
association with others, and to do every other act or thing incidental or
appurtenant to or growing out of or connected with the aforesaid business or
purposes, objects or powers.
The foregoing clauses shall be construed both as objects and powers,
and the foregoing enumeration of specific powers shall not be held to limit or
restrict in any manner the general powers of the Trustees.
_____________________
1 Adoption of this Section requires the affirmative vote of two thirds of the
shares of the Trust outstanding and entitled to vote.
- 4 -
<PAGE>
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.
Section 2.3. Legal Title.
Legal title to all the Trust Property, including the property of any
Series of the Trust, shall be vested in the Trustees as joint tenants except
that the Trustees shall have power to cause legal title to any Trust Property to
be held by or in the name of one or more of the Trustees, or in the name of the
Trust, or in the name of any other Person as nominee, on such terms as the
Trustees may determine, provided that the interest of the Trust therein is^
deemed appropriately protected. The right, title and interest of the Trustees in
the Trust Property and the property of each Series of the Trust shall vest
automatically in each Person who may hereafter become a Trustee. Upon the
termination of the term of office, resignation, removal or death of a Trustee he
shall automatically cease to have any right, title or interest in any of the
Trust Property or the property of any Series of the Trust, and the right, title
and interest of such Trustee in the Trust Property shall vest automatically in
the remaining Trustees. Such vesting and cessation of title shall be effective
whether or not conveyancing documents have been executed and delivered.
Section 2.4. Issuance and Repurchase of Shares.
The Trustees shall have the power to issue, sell, repurchase, redeem,
retire, cancel, acquire, hold, resell, reissue, dispose of, transfer, and
otherwise deal in Shares and, subject to the provisions set forth in Articles VI
and VII and Section 5.11 hereof, to apply to any such repurchase, redemption,
retirement, cancellation or acquisition of Shares any funds or property of the
particular series of the Trust with respect to which such Shares are issued,
whether capital or surplus or otherwise, to the full extent now or hereafter
permitted by the laws of the Commonwealth of Massachusetts governing business
corporations.
Section 2.5. Delegation; Committees.
The Trustees shall have power 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
the names of the Trustees or otherwise as the Trustees may deem expedient, to
the same extent as such delegation is permitted by the 1940 Act.
Section 2.6. Collection and Payment.
The Trustees shall have power to collect all property due to the Trust;
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.
Section 2.7. Expenses.
The Trustees shall have the 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.
- 5 -
<PAGE>
Section 2.8. 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 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 or repeal such By-laws to
the extent such power is not reserved to the Shareholders.
Notwithstanding the foregoing provisions of this Section 2.8 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.
Section 2.9. Miscellaneous Powers.
Subject to Section 5.11^ hereof, 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; (b) enter into joint ventures,
partnerships and any other combinations or associations; (c) remove Trustees or
fill vacancies in or add to their number, elect and remove such officers and
appoint and terminate such agents or employees as they consider appropriate, and
appoint from their own number, and terminate, any one or more committees which
may exercise some or all of the power and authority of the Trustees as the
Trustees may determine; (d) purchase, and pay for out of Trust Property,
insurance policies insuring the Shareholders, Trustees, officers, employees,
agents, investment advisers, distributors, selected dealers 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 constituting negligence, or whether or not the
Trust would have the power to indemnify such Person against such liability; (e)
establish pension, profit-sharing, share purchase, and other retirement,
incentive and benefit plans for any Trustees, officers, employees and agents of
the Trust; (f) to the extent permitted by law, indemnify any person with whom
the Trust has dealings, including the Investment Adviser, Distributor, Transfer
Agent and selected dealers, 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 and the method by which its accounts shall
be kept; and (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.
Section 2.10. Principal Transactions.
Except in transactions not permitted by the 1940 Act or rules and
regulations adopted by the Commission, the Trustees may, on behalf of the Trust,
buy any securities from or sell any securities to, or lend any assets of the
Trust to, any Trustee or officer of the Trust or any firm of which any such
Trustee or officer is a member acting as principal, or have any such dealings
with the Investment Adviser, Distributor or ^ transfer agent or with any
Interested Person ^ or such Person; and the Trust may employ any such Person, or
firm or company in which such Person is
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an Interested Person, as broker, dealer, legal counsel, registrar, ^ transfer
agent, dividend disbursing agent or ^ Custodian upon customary terms.
Section 2.11. Number of Trustees.
The number of Trustees shall initially be one (1), and thereafter shall
be such number as shall be fixed from time to time by a written instrument
signed by a majority of the Trustees^.
Section 2.12. ^ Election and Term.
Except for the Trustees named herein or appointed to fill vacancies
pursuant to Section 2.14 hereof, the Trustees shall be elected by the
Shareholders owning of record a plurality of the Shares voting at a meeting of
Shareholders. Such a meeting shall be held on a date fixed by the Trustees.
Except in the event of resignation or removals pursuant to Section 2.13 hereof,
each Trustee shall hold office until such time as less than a majority of the
Trustees holding office have been elected by Shareholders, and thereafter until
the holding of a Shareholders' meeting as required by the next following
sentence. In such event the Trustees then in office will call a Shareholders'
meeting for the election of Trustees. Except for the foregoing circumstances,
the Trustees shall continue to hold office and may appoint successor Trustees.
Section 2.13. Resignation and Removal.
Any Trustee may resign his trust (without the need for any prior or
subsequent accounting) by an instrument in writing signed by him and delivered
to the other Trustees and such resignation shall be effective upon such
delivery, or at a later date according to the terms of the instrument. Any of
the Trustees may be removed (provided the aggregate number of Trustees after
such removal shall not be less than one) with cause, by the action^ of
two-thirds of the remaining Trustees. Any Trustee may be removed at any meeting
of Shareholders by vote of two-thirds of the Outstanding Shares. The ^ Trustees
shall promptly call a meeting of the shareholders for the purpose of voting upon
the question of removal of any such Trustee or Trustees when requested in
writing so to do by the holders of not less than ten percent of the Outstanding
Shares^ and, in that connection, the Trustees will assist shareholder
communications to the extent provided for in Section 16(c) under the 1940 Act.
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 or property of any series of the Trust held in the
name of the resigning or removed Trustee. Upon the incapacity or death of any
Trustee, his legal representative shall execute and deliver on his behalf such
documents as the remaining Trustees shall require as provided in the preceding
sentence.
Section 2.14. Vacancies.
The term of office of a Trustee shall terminate and a vacancy shall
occur in the event of the death, 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, made by a written
instrument signed by a majority of the Trustees then in office. Any such
appointment shall not become effective, however, until the person named in the
written
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instrument of appointment shall have accepted in writing such appointment and
agreed in writing to be bound by the terms of the Declaration. 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 2.14, 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.
Section 2.15. Delegation of Power to Other Trustees.
Any Trustee may, by power of attorney, delegate his power for a period
not exceeding six (6) months at any one time to any other Trustee or Trustees;
provided that in no case shall less than two (2) Trustees personally exercise
the powers granted to the Trustees under this Declaration except as herein
otherwise expressly provided.
Section 2.16. Shareholder Vote, etc. Not Required.
Except to the extent specifically provided to the contrary in this
Declaration, the Trustees may exercise each of the powers granted to them in
this Declaration without the vote, approval or agreement of the Shareholders,
unless such a vote, approval or agreement is required by the 1940 Act or
applicable laws of the Commonwealth of Massachusetts.
ARTICLE III
CONTRACTS
Section 3.1. ^ Distribution Contract.
^ The Trustees may in their discretion from time to time enter into an
exclusive or non-exclusive underwriting contract or contracts providing for the
sale of the Shares at a price based on the net asset value of a Share, whereby
the Trustees may either agree to sell the Shares to the other party to the
contract or appoint such other party their sales agent for the Shares, and in
either case on such terms and conditions, if any, as may be prescribed in the
By-laws^, and such further terms and conditions as the Trustees may in their
discretion determine not inconsistent with the provisions of this Article III or
of the By-laws; and such contract may also provide for the repurchase of the
Shares by such other party as agent of the Trustees.
Section 3.2. Advisory or Management Contract.
The Trustees may in their discretion from time to time enter into an
investment advisory or management contract or separate advisory contracts with
respect to one or more Series whereby the other party to such contract shall
undertake to furnish to the Trust such management, investment advisory,
statistical and research facilities and services and such other facilities and
services, if any, and all upon such terms and conditions as the Trustees may in
their discretion determine, including the grant of authority to such other party
to determine what securities shall be purchased or sold by the Trust and what
portion of its assets shall be uninvested, which authority shall include the
power to make changes in the investments of the Trust or any Series.
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The Trustees may also employ, or authorize the Investment Adviser to
employ, one or more sub-advisers from time to time to perform such of the acts
and services of the Investment Adviser and upon such terms and conditions as may
be agreed upon between the Investment Adviser and such sub-advisers and approved
by the Trustees. Any reference in this Declaration to the Investment Adviser
shall be deemed to include such ^ sub-advisers unless the context otherwise
requires.
Section 3.3. Affiliations of Trustees or Officers, Etc.
The fact that:
(i) any of the Shareholders, Trustees or officers of the
Trust is a shareholder, director, officer, partner, trustee, employee,
manager, adviser or distributor of or for any partnership, corporation,
trust, association or other organization or of or for any parent or
affiliate of any organization, with which a contract of the character
described in Sections 3.1 or 3.2 above or for services as Custodian,
Transfer Agent, accounting agent or disbursing agent or for related
services may have been or may hereafter be made, or that any such
organization, or any parent or affiliate thereof, is a Shareholder of
or has an interest in the Trust, or that
(ii) any partnership, corporation, trust, association or
other organization with which a contract of the character described in
Sections 3.1 or 3.2 above or for services as Custodian, Transfer Agent,
accounting agent or disbursing agent or for related services may have
been or may hereafter be made also has any one or more of such
contracts with one or more other partnerships, corporations, trusts,
associations or other organizations, or has other business or
interests, shall not affect the validity of any such contract or
disqualify any Shareholder, Trustee or officer of the Trust from voting
upon or executing the same or create any liability or accountability to
the Trust or its Shareholders.
Section 3.4. Compliance with 1940 Act.
Any contract entered into pursuant to Sections 3.1 or 3.2 shall be
consistent with and subject to the requirements of Section 15 of the 1940 Act
(including any amendment thereof or other applicable act of Congress hereafter
enacted), as modified by any applicable order or orders of the Commission, with
respect to its continuance in effect, its termination and the method of
authorization and approval of such contract or renewal thereof.
ARTICLE IV
LIMITATIONS OF LIABILITY OF SHAREHOLDERS,
TRUSTEES AND OTHERS
Section 4.1. ^ No Personal Liability of Shareholders, Trustees, Etc.
^ No Shareholder shall be subject to any personal liability whatsoever
to any Person in connection with Trust Property or the acts, obligations or
affairs of the Trust. No Trustee, officer, employee or agent of the Trust shall
be subject to any personal liability whatsoever to any Person, other than to the
Trust or its Shareholders, in connection with Trust Property or the affairs of
the Trust, save only that arising from bad faith, willful misfeasance, gross
negligence or reckless disregard of his duties with respect to such Person; and
all such Persons shall look solely to the Trust Property for satisfaction of
claims of any nature arising in connection with the affairs
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of the Trust. If any Shareholder, Trustee, officer, employee, or agent, as such,
of the Trust, is made a ^ part to any suit or proceeding to enforce any such
liability of the Trust, he shall not, on account thereof, be held to any
personal liability. The Trust shall indemnify and hold each Shareholder harmless
from and against all claims and liabilities, to which such Shareholder may
become subject by reason ^ for his being or having been a Shareholder, and shall
reimburse such Shareholder for all legal and other expenses reasonably incurred
by him in connection with any such claim or liability. The indemnification and
reimbursement required by the preceding sentence shall be made only out of the
assets of the one or more Series of which the Shareholder who is entitled to
indemnification or reimbursement was a Shareholder at the time the act or event
occurred which gave rise to the claim against or liability of said Shareholder.
The rights accruing to a Shareholder under this Section 4.1 shall not impair any
other right to which such Shareholder may be lawfully entitled, nor shall
anything herein contained restrict the right of the Trust to indemnify or
reimburse a Shareholder in any appropriate situation even though not
specifically provided herein.
Section 4.2. Non-Liability of Trustees, Etc.
No Trustee, officer, employee or agent of the Trust shall be liable to
the Trust, its Shareholders, or to any Shareholder, 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 the duties involved in the conduct of his
office.
Section 4.3. Mandatory Indemnification.
(a) ^ Subject to the exceptions and limitations contained in paragraph
(b) below:
(i) ^ every person who is, or has been, a Trustee or officer
of the Trust shall be indemnified by the Trust 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, administrative 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 Shareholders by reason of a final adjudication by a court or other
body before which a proceeding was brought that he engaged in 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;
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(iii) in the event of a settlement or other disposition not
involving a final adjudication as provided in paragraph (b)(i) or
(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; or
(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 Disinterested Trustees acting on the matter
(provided that a majority of the Disinterested Trustees then
in office act on the matter) or (y) written opinion of
independent legal counsel.
(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 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 4.3 may be advanced by the Trust 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 4.3, provided that either:
(i) such undertaking is secured by a surety bond or some
other appropriate security provided by the recipient, or the Trust
shall be insured against losses arising out of any such advances; or
(ii) a majority of the Disinterested Trustees acting on the
matter (provided that a majority of the Disinterested 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 4.3, a "Disinterested Trustee" is one
who is not (i) 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), or (ii) involved in the claim,
action, suit or ^ proceeding.
Section 4.4. No Bond Required of Trustees.
No Trustee shall be obligated to give any bond or other security for
the performance of any of his duties hereunder.
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Section 4.5. No Duty of Investigation; Notice in Trust Instruments,
Etc.
No purchaser, lender, transfer agent or other Person dealing with the
Trustees or any officer, employee or agent of the Trust 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, Share, other security of the Trust or
undertaking, and every other act or thing whatsoever executed in connection with
the Trust shall be conclusively presumed to have been executed or done by the
executors thereof only in their capacity as Trustees under this Declaration or
in their capacity as officers, employees or agents of the Trust. Every written
obligation, contract, instrument, certificate, Share, other security of the
Trust or undertaking made or issued by the Trustees may recite that the same is
executed or made by them not individually, but as Trustees under the
Declaration, and that the obligations of the Trust under any such instrument are
not binding upon any of the Trustees or Shareholders individually, but bind only
the trust estate, and may contain any further recital which they or he may deem
appropriate, but the omission of such recital shall not operate to bind the
Trustees individually. The Trustees shall at all times maintain insurance for
the protection of the Trust Property, its Shareholders, 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.
Section 4.6. Reliance on Experts, Etc.
Each Trustee and officer or employee of the Trust shall, in the
performance of his duties, be fully and completely justified and protected with
regard to any act or any failure to act resulting from reliance in good faith
upon the books of account or other records of the Trust, upon an opinion of
counsel, or upon reports made to the Trust by any of its officers or employees
or by the Investment Adviser, the Distributor, Transfer Agent, selected dealers,
accountants, appraisers 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 V
SHARES OF BENEFICIAL INTEREST
Section 5.1. ^ Beneficial Interest.
^ The interest of the beneficiaries hereunder shall be divided into
transferable Shares of beneficial interest, all of one class, except as provided
in Section 5.11 and Section 5.13 hereof, par value $.01 per share. The number of
Shares of beneficial interest authorized hereunder is unlimited. All Shares
issued hereunder including, without limitation, Shares issued in connection with
a dividend in Shares or a split of Shares, shall be fully paid and
non-assessable.
Section 5.2. Rights of Shareholders.
The ownership of the Trust Property and the property of each Series of
the Trust of every description and the right to conduct any business ^
herein-before described are vested exclusively in the Trustees, and the
Shareholders shall have no interest therein other than the beneficial interest
conferred by their Shares, and they shall have no right to call for any
partition or division of any property, profits, rights or interests of the Trust
nor can they be called upon to share or
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assume any losses of the Trust or suffer an assessment of any kind by virtue of
their ownership of Shares. The Shares shall be personal property giving only the
rights specifically set forth in this Declaration. The Shares shall not entitle
the holder to preference, preemptive, appraisal, conversion or exchange rights,
except as the Trustees may determine with respect to any Series of Shares.
Section 5.3. Trust Only.
It is the intention of the Trustees to create only the relationship of
Trustee and beneficiary between the Trustees and each Shareholder from time to
time. It is not the intention of the Trustees to create a general partnership,
limited partnership, joint stock association, corporation, bailment or any form
of legal relationship other than a trust. Nothing in this Declaration ^ shall be
construed to make the Shareholders, either by themselves or with the Trustees,
partners or members of a joint stock association.
Section 5.4. Issuance of Shares.
The Trustees in their discretion may, from time to time without vote of
the Shareholders, issue Shares, in addition to the then issued and outstanding
Shares and Shares held in the treasury, 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 Shares, the Trustees may issue fractional Shares and Shares
held in the treasury. The Trustees may from time to time divide or combine the
Shares into a greater or lesser number without thereby changing the
proportionate beneficial interests in the Trust. Contributions to the Trust may
be accepted for, and Shares shall be redeemed as, whole Shares and/or 1/1,000ths
of a Share or integral multiples thereof.
Section 5.5. Register of Shares.
A register shall be kept at the principal office of the Trust or an
office of the Transfer Agent which shall contain the names and addresses of the
Shareholders and the number of Shares held by them respectively and a record of
all transfers thereof. Such register shall be conclusive as to who are the
holders of the Shares and who shall be entitled to receive dividends or
distributions or otherwise to exercise or enjoy the rights of Shareholders. No
Shareholder shall be entitled to receive payment of any dividend or
distribution, nor to have notice given to him as herein or in the By-laws
provided, until he has given his address to the Transfer Agent or such other
officer or agent of the Trustees as shall keep the said register for entry
thereon. It is not contemplated that certificates will be issued for the Shares;
however, the Trustees, in their discretion, may authorize the issuance of share
certificates and promulgate appropriate rules and regulations as to their use.
Section 5.6. Transfer of Shares.
Except as otherwise provided by the Trustees, shares shall be
transferable on the records of the Trust only by the record holder thereof or by
his agent thereunto duly authorized ^, upon delivery to the Trustees or the
Transfer Agent of a duly executed instrument of transfer, together with such
evidence of the genuineness of each such execution and authorization and of
other matters as may reasonably be required. Upon such delivery the transfer
shall be recorded on the register of the Trust. Until such record is made, the
Shareholder of record shall be deemed to be
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the holder of such Shares for all purposes hereunder and neither the Trustees
nor any transfer agent or registrar nor any officer, employee or agent of the
Trust shall be affected by any notice of the proposed transfer.
Any person becoming entitled to any Shares in consequence of the death,
bankruptcy, or incompetence of any Shareholder, or otherwise by operation of
law, shall be recorded on the register of Shares as the holder of such Shares
upon production of the proper evidence thereof to the Trustees or the Transfer
Agent, but until such record is made, the Shareholder of record shall be deemed
to be the holder of such Shares for all purposes hereunder and neither the
Trustees nor any Transfer Agent or registrar nor any officer or agent of the
Trust shall be affected by any notice of such death, bankruptcy or incompetence,
or other operation of law.
Section 5.7. Notices, Reports.
Any and all notices to which any Shareholder may be entitled and any
and all communications shall be deemed duly served or given if mailed, postage
prepaid, addressed to any Shareholder of record at his last known address as
recorded on the register of the Trust. A notice of a meeting, an annual report
and any other communication to Shareholders need not be sent to a Shareholder
(i) if an annual report and a proxy statement for two consecutive shareholder
meetings have been mailed to such Shareholder's address and have been returned
as undeliverable, (ii) if all, and at least two, checks (if sent by first class
mail) in payment of dividends on Shares during a twelve-month period have been
mailed to such Shareholder's address and have been returned as undeliverable or
(iii) in any other case in which a proxy statement concerning a meeting of
security holders is not required to be given pursuant to the Commission's proxy
rules as from time to time in effect under the Securities Exchange Act of 1934.
However, delivery of such proxy statements, annual reports and other
communications shall resume if and when such Shareholder delivers or causes to
be delivered to the Trust written notice setting forth such Shareholder's then
current address.
Section 5.8. Treasury Shares.
Shares held in the treasury shall, until reissued pursuant to Section
5.4, not confer any voting rights on the Trustees, nor shall such Shares be
entitled to any dividends or other distributions declared with respect to the
Shares.
Section 5.9. Voting Powers.
The Shareholders shall have power to vote only (i) for the election of
Trustees as provided in Section 2.12; (ii) for the removal of Trustees as
provided in Section 2.13; (iii) with respect to any ^ amendment of this
Declaration to the extent and as provided in Section 8.3; ^(iv) to the same
extent as the stockholders of Massachusetts business corporation as to whether
or not a court action, proceeding or claim should or should not be brought or
maintained derivatively or as a class action on behalf of the Trust or ^ any
Series or Class thereof or the Shareholders (provided, however, that a
Shareholder of a particular Series or Class shall not be entitled to bring a
derivative or class action on behalf of any other Series or Class (or
Shareholder of any other Series or Class) of the Trust); and (v) with respect to
such additional matters relating to the Trust as may be required by this
Declaration, the By-laws or any registration of the Trust as an investment
company under the 1940 Act with the Commission (or any successor agency) or as
the Trustees may consider necessary or desirable. Each whole Share shall be
entitled to one vote as to any matter on which it is entitled to vote and each
fractional Share shall be entitled to a proportionate fractional vote, except
that the Trustees may, in conjunction with
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the establishment of any Series or Class of Shares, establish or reserve the
right to establish conditions under which the several Series or Classes shall
have separate voting rights or^ no voting rights. There shall be no cumulative
voting in the election of Trustees. Until Shares are issued, the Trustees may
exercise all rights of Shareholders and may take any action required by law,
this Declaration or the By-laws to be taken by Shareholders. The ^ By-laws may
include further provisions ^ for ^ Shareholders' votes and meetings and related
matters.
Section 5.10. Meetings of Shareholders.
Meetings of Shareholders may be called at any time by the President,
and shall be called by the President and Secretary at the request in writing or
by resolution, of a majority of Trustees, or at the written request of the
holder or holders of ten percent (10%) or more of the total number of Shares
then issued and outstanding of the Trust entitled to vote at such meeting. Any
such request shall state the purpose of the proposed meeting.
Section 5.11. Series Designation.
The Trustees, in their discretion, may authorize the division of Shares
into two or more Series, and the different Series 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; provided,
that all Shares shall be identical except that there may be variations so fixed
and determined between different Series as to investment objective, purchase
price, allocation of expenses, right of redemption, special and relative rights
as to dividends and on liquidation, conversion rights, and conditions under
which the several Series shall have separate voting rights. All references to
Shares in this Declaration shall be deemed to be Shares of any or all ^ Series
as the context may require.
(a) ^ All provisions herein relating to the Trust shall apply equally
to each Series of the Trust except as the context requires otherwise.
(b) The number of authorized Shares and the number of Shares of each
Series that may be issued shall be unlimited. The Trustees may classify or
reclassify any unissued Shares or any Shares previously issued and reacquired of
any Series into one or more Series that may be established and designated from
time to time. The Trustees may hold as treasury Shares (of the same or some
other Series), reissue for such consideration and on such terms as they may
determine, or cancel any Shares of any Series reacquired by the Trust at their
discretion from time to time.^
(c) All consideration received by the Trust for the issue or sale of
Shares of a particular Series, together with all assets in which such
consideration is invested or reinvested, all income, earnings, profits, and
proceeds thereof, including any proceeds derived from the sale, exchange or
liquidation of such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, shall
irrevocably belong to that Series for all purposes, subject only to the rights
of creditors of such Series and except as may otherwise be required by
applicable 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, the Trustees shall allocate them among any
one or more of the Series 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 ^ Shareholders of all Series for all purposes.
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(d) The assets belonging to each particular Series shall be charged
with the liabilities of the Trust in respect of that Series and with all
expenses, costs, charges and reserves attributable to that Series, and any
general liabilities, expenses, costs, charges or reserves of the Trust which are
not readily identifiable as belonging to any particular Series shall be
allocated and charged by the Trustees to and among any one or more of the Series
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 Shareholders of all Series 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 Shareholders. The assets of
a particular Series of the Trust shall, under no circumstances, be charged with
liabilities attributable to any other Series of the Trust. All persons extending
credit to, or contracting with or having any claim against a particular Series
of the Trust shall look only to the assets of that particular Series for payment
of such credit, contract or claim. No Shareholder or former Shareholder of any
Series shall have any claim on or right to any assets allocated or belonging to
any other ^ Series.
(e) Each Share of a Series of the Trust shall represent a beneficial
interest in the net assets of such Series. Each holder of Shares of a Series
shall be entitled to receive his pro rata share of distributions of income and
capital gains made with respect to such Series, except as provided in Section
5.13 hereof. Upon redemption of his Shares or indemnification for liabilities
incurred by reason of his being or having been a Shareholder of a Series, such ^
Shareholder shall be paid solely out of the funds and property of such Series of
the Trust. Upon liquidation or termination of a Series of the Trust,
Shareholders of such Series shall be entitled to receive a pro rata share of the
net assets of such Series, except as provided in Section 5.13 hereof. A
Shareholder 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
Shareholders of any other Series of the Trust.
(f) The establishment and designation of any ^ Series of Shares 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 as otherwise provided in such
instrument. The Trustees may by an instrument executed by a majority of their
number abolish any Series and the establishment and designation thereof. Except
as otherwise provided in this Article V, the Trustees shall have the power to
determine the designations, preferences, privileges, limitations and rights, of
each class and Series of Shares. Each instrument referred to in this paragraph
shall have the status of an amendment to this Declaration.
Section 5.12. Assent to Declaration of Trust.
Every Shareholder, by virtue of having become a shareholder, shall be
held to have expressly assented and agreed to the terms hereof and to have
become a party hereto.
Section 5.13. Class Designation.
The Trustees, in their discretion, may authorize the division of the
Shares of the Trust, or, if any Series be established, the Shares of any Series,
into two or more Classes, and the different Classes shall be established and
designated, and the variations in the relative rights and preferences as between
the different Classes shall be fixed and determined, by the Trustees; provided,
that all Shares of the Trust or of any Series shall be identical to all other
Shares of the Trust or the same Series, as the case may be, except ^ that there
may be variations between
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different ^ Classes as to allocation of expenses, right of redemption, special
and relative rights as to dividends and on liquidation, conversion rights, and
conditions under which the several Classes shall have separate voting rights.
All references to Shares in this Declaration shall be deemed to be Shares of any
or all Classes as the context may require.
If the Trustees shall divide the Shares of the Trust or any Series into two or
more Classes, the following provisions shall be applicable:
(a) All provisions herein relating to the Trust, or any Series of the
Trust, shall apply equally to each Class of Shares of the Trust or of any Series
of the Trust, except as the context requires otherwise.
(b) The number of Shares of each Class that may be issued shall be
unlimited. The Trustees may classify or reclassify any ^ Shares or any Series of
any Shares into one or more Classes that may be established and designated from
time to time. The Trustees may hold as treasury Shares (of the same or some
other Class), reissue for such consideration and on such terms as they may
determine, or ^ cancel any Shares of any Class reacquired by the Trust at their
discretion from time to time.
(c) Liabilities, expenses, costs, charges and reserves related to the
distribution of, and other identified expenses that should properly be allocated
to, the Shares of a particular Class may be charged to and borne solely by such
Class and the bearing of expenses solely by a Class of Shares may be
appropriately reflected (in a manner determined by the Trustees) and cause
differences in the net asset value attributable to, and the dividend, redemption
and liquidation rights of, the Shares of different ^ classes. Each allocation of
liabilities, expenses, costs, charges and reserves by the Trustees shall be
conclusive and binding upon the Shareholders of all Classes for all purposes.
(d) The establishment and designation of any Class of Shares 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 Class, or as otherwise provided ^ in such
instrument. The Trustees may, by an instrument executed by a majority of their
number, abolish any Class and the establishment and designation thereof. Each
instrument referred to in this paragraph shall have the status of an amendment
to this Declaration.
ARTICLE VI
REDEMPTION AND REPURCHASE OF SHARES
Section 6.1. ^ Redemption of Shares.
^ All Shares of the Trust shall be redeemable, at the redemption price
determined in the manner set out in this Declaration. Redeemed or repurchased
Shares may be resold by the Trust.
The Trust shall redeem the Shares upon the appropriately verified
written application of the record holder thereof (or upon such other form of
request as the Trustees may determine) at such office or agency as may be
designated from time to time for that purpose in the Trust's then effective
registration statement under the Securities Act of 1933. The Trustees may from
time to time specify additional conditions, not inconsistent with the 1940 Act,
regarding the redemption of Shares in the Trust's then effective registration
statement under the Securities Act of 1933.
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<PAGE>
Section 6.2. Price.
Shares shall be redeemed at their net asset value, which may be reduced
by any redemption fee authorized by the Trustees, determined as set forth in
Section 7.1 hereof as of such time as the Trustees shall have theretofore
prescribed by resolution. In the absence of such resolution, the redemption
price of Shares deposited shall be the net asset value of such Shares next
determined as set forth in Section 7.1 hereof after receipt of such application.
Section 6.3. Payment.
Payment for such Shares shall be made in cash or in property out of the
assets of the relevant ^ Series of the Trust to the Shareholder of record at
such time and in the manner, not inconsistent with the 1940 Act or other
applicable laws, as may be specified from time to time in the Trust's then
effective registration statement under the Securities Act of 1933, subject to
the provisions of Section 6.4 hereof.
Section 6.4. Effect of Suspension of Determination of
Net Asset Value.
If, pursuant to Section 6.9 hereof, the Trustees shall declare a
suspension of the determination of net asset value, the rights of Shareholders
(including those who shall have applied for redemption pursuant to Section 6.1
hereof but who shall not yet have received payment) to have Shares redeemed and
paid for by the Trust shall be suspended until the termination of such
suspension is declared. Any record holder who shall have his redemption right so
suspended may, during the period of such suspension, by appropriate written
notice of revocation at the office or agency where application was made, revoke
any application for redemption not honored and withdraw any certificates on
deposit. The redemption price of Shares for which redemption applications have
not been revoked shall be the net asset value of such Shares next determined as
set forth in Section 7.1 after the termination of such suspension, and payment
shall be made within seven (7) days after the date upon which the application
was made plus the period after such application during which the determination
of net asset value was suspended.
Section 6.5. Repurchase by Agreement.
The Trust may repurchase Shares directly, or through the Distributor or
another agent designated for the purpose, by agreement with the owner thereof at
a price not exceeding the net asset value per ^ Share determined as of the time
when the purchase or contract of purchase is made or the net asset value as of
any time which may be later determined pursuant to Section 7.1 hereof, provided
payment is not made for the Shares prior to the time as of which such net asset
value is determined.
Section 6.6. Redemption of Shareholder's Interest.
The Trust shall have the right at any time without prior notice to the
^ Shareholder to redeem Shares of any ^ Shareholder for their then current net
asset value per ^ Share if
(a) at such time the ^ Shareholder owns Shares having an aggregate net
asset value of less than an amount set from time to time by the Trustees subject
to such terms and conditions as the Trustees may approve, and subject to the
Trust's giving general notice to all ^ Shareholders of its intention to avail
itself of such right, either by publication in the Trust's registration
statement, if any, or by such other means as the Trustees may determine, or^
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<PAGE>
(b) ^ The Trustees believe that it is in the best interest of the
Trust to do so because of prior involvement by the Shareholder in fraudulent
acts relating to securities transactions.
Section 6.7. Redemption of Shares in Order to Qualify as Regulated
Investment Company; Disclosure of Holding.
If the Trustees shall, at any time and in good faith, be of the opinion
that direct or indirect ownership of Shares or other securities of the Trust has
or may become concentrated in any Person to an extent which would disqualify any
Series of the Trust as a regulated investment company under the Internal Revenue
Code, then the Trustees shall have the power by lot or other means deemed
equitable by them (i) to call for redemption by any such Person a number, or
principal amount, of Shares or other securities of the Trust sufficient to
maintain or bring the direct or indirect ownership of Shares or other securities
of the Trust into conformity with the requirements for such qualification and
(ii) to refuse to transfer or issue Shares or other securities of the Trust to
any Person whose acquisition of the Shares or other securities of the Trust in
question would result in such disqualification. The redemption shall be effected
at the redemption price and in the manner provided in Section 6.1.
The holders of Shares or other securities of the Trust shall upon
demand disclose to the Trustees in writing such information with respect to
direct and indirect ownership of Shares or other securities of the Trust as the
Trustees deem necessary to comply with the provisions of the Internal Revenue
Code, or to comply with the requirements of any other taxing authority.
Section 6.8. Reductions in Number of Outstanding Shares Pursuant to
Net Asset Value Formula.
The Trust may also reduce the number of Outstanding Shares pursuant to
the provisions of Section 7.3.
Section 6.9. Suspension of Right of Redemption.
The Trust may declare a suspension of the right of redemption or
postpone the date of payment or redemption for the whole or any part of any
period (i) during which the New York Stock Exchange is closed other than
customary week-end and holiday closings, (ii) during which trading on the New
York Stock Exchange is restricted, (iii) during which an emergency exists as a
result of which disposal by the Trust of securities owned by it is not
reasonably practicable or it is not reasonably practicable for the Trust fairly
to determine the value of its net assets, or (iv) during any other period when
the Commission may for the protection of Shareholders of the Trust by order
permit suspension of the right of redemption or postponement of the date of
payment or redemption; provided that applicable rules and regulations of the
Commission shall govern as to whether the conditions prescribed in (ii), (iii),
or (iv) exist. Such suspension shall take effect at such time as the Trust shall
specify but not later than the close of business on the business day next
following the declaration of suspension, and thereafter there shall be no right
of redemption or payment on redemption until the Trust shall declare the
suspension at an end, except that the suspension shall terminate in any event on
the first day on which said stock exchange shall have reopened or the period
specified in (ii) or (iii) shall have expired (as to which in the absence of an
official ruling by the Commission, the determination of the Trust shall be
conclusive). In the case of a suspension of the right of redemption, a
Shareholder may either withdraw his request for redemption or receive payment
based on the net asset value existing after the termination of the suspension.
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ARTICLE VII
DETERMINATION OF NET ASSET VALUE,
NET INCOME AND DISTRIBUTIONS
Section 7.1. ^ Net Asset Value.
^ The value of the assets of the Trust or any Series of the Trust shall
be determined by appraisal of the securities of the Trust or allocated to such
Series, such appraisal to be on the basis of ^ such method as shall be deemed to
reflect the fair value thereof, determined in good faith by or under the
direction of the Trustees. From the total value of said assets, there shall be
deducted all indebtedness, interest, taxes, payable or accrued, including
estimated taxes on unrealized book profits, expenses and management charges
accrued to the appraisal date, net income determined and declared as a
distribution and all other items in the nature of liabilities attributable to
the Trust or such Series or Class thereof which shall be deemed appropriate. The
net asset value of a Share shall be determined by ^ dividing the net asset value
of the Class, or, if no Class has been established, of the Series, or, if no
Series has been established, of the Trust, by the number of Shares of that
Class, or Series, or of the Trust, as applicable, outstanding. The net asset
value of Shares of the Trust or any Class or Series of the Trust shall be
determined pursuant to the procedure and methods prescribed or approved by the
Trustees in their discretion and as set forth in the most recent Registration
Statement of the Trust as filed with the Securities and Exchange Commission
pursuant to the requirements of the Securities Act of 1933, as amended, the ^
1940 Act, as amended, and the Rules thereunder. The net asset value of the
Shares shall be determined at least once on each business day, as of the close
of trading on the New York Stock Exchange or as of such other time or times as
the Trustees shall determine. The power and duty to make the daily calculations
may be delegated by the Trustees to the Investment Adviser, the Custodian, the
Transfer Agent or such other Person as the Trustees may determine by resolution
or by approving a contract which delegates such duty to another Person. The
Trustees may suspend the daily determination of ^ net asset value to the extent
permitted by the 1940 Act.
Section 7.2. ^ Distributions to Shareholders.
The Trustees shall from time to time distribute ratably among the
Shareholders of the Trust or a Series such proportion of the net profits,
surplus (including paid-in surplus), capital, or assets of the Trust or such
Series held by the Trustees as they may deem proper. Such distributions may be
made in cash or property (including without limitation any type of obligations
of the Trust or such Series or any assets thereof), and the Trustees may
distribute ratably among the Shareholders additional Shares of the Trust or such
Series issuable hereunder in such manner, at such times, and on such terms as
the Trustees may deem proper. Such distributions may be among the Shareholders
of record at the time of declaring a distribution or among the Shareholders of
record at such other date or time or dates or times as the Trustees shall
determine. The Trustees may in their discretion determine that, solely for the
purposes of such distributions, Outstanding Shares shall exclude Shares for
which orders have been placed subsequent to a specified time on the date the
distribution is declared or on the next preceding day if the distribution is
declared as of a day on which Boston banks are not open for business, all as
described in the ^ registration statement under the Securities Act of 1933. 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 the Series or to meet
obligations of the Trust or the Series, 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. The Trustees may adopt and offer to Shareholders such dividend
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<PAGE>
reinvestment plans, cash dividend payout plans or related plans as the Trustees
shall deem appropriate. The above provisions may be modified to the extent
required by a plan adopted by the Trustees to establish Classes of Shares of the
Trust or of a Series.
Inasmuch as the computation of net income and gains for Federal income
tax purposes may vary from the computation thereof on the books, the above
provisions shall be interpreted to give the Trustees the power in their
discretion to distribute for any fiscal year as ordinary dividends and as
capital gains distributions, respectively, additional amounts sufficient to
enable the Trust or the Series to avoid or reduce liability for taxes.
Section 7.3. Determination of Net Income; Constant Net Asset Value;
Reduction of Outstanding Shares.
Subject to Section 5.11 and Section 5.13 hereof, the net income of the
Trust or any Series shall be determined in such manner as the Trustees shall
provide by resolution. Expenses of the Trust or a Series, including the advisory
or management fee, shall be accrued each day. Such net income may be determined
by or under the direction of the Trustees as of the close of trading on the New
York Stock Exchange on each day on which such Exchange is open or as of such
other time or times as the Trustees shall determine, and, except as provided
herein, all the net income of the Trust or any Series, as so determined, may be
declared as a dividend on the Outstanding Shares of the Trust or such Series.
If, for any reason, the net income of the Trust or any Series, determined at any
time is a negative amount, the Trustees shall have the power with respect to the
Trust or such Series (i) to offset each Shareholder's pro rata share of such
negative amount from the accrued dividend account of such Shareholder, or (ii)
to reduce the number of Outstanding Shares of the Trust or such Series by
reducing the number of Shares in the account of such Shareholder by that number
of full and fractional Shares which represents the amount of such excess
negative net income, or (iii) to cause to be recorded on the books of the Trust
or such Series an asset account in the amount of such negative net income, which
account may be reduced by the amount, provided that the same shall thereupon
become the property of the Trust or such Series with respect to the Trust or
such Series and shall not be paid to any Shareholder, of dividends declared
thereafter upon the Outstanding Shares of the Trust or such Series on the day
such negative net income is experienced, until such asset account is reduced to
zero; or (iv) to combine the methods described in clauses (i) and (ii) and (iii)
of this sentence, in order to cause the net asset value per Share of the Trust
or such Series to remain at a constant amount per Outstanding Share immediately
after each such determination and declaration. The Trustees shall also have the
power to fail to declare a dividend out of net income for the purpose of causing
the net asset value per Share to be increased to a constant amount. The Trustees
shall not be required to adopt, but may at any time adopt, discontinue or amend
the practice of maintaining the net asset value per Share of the Trust or a
Series at a constant amount.
Section 7.4. Allocation Between Principal and Income.
The Trustees shall have full discretion to determine whether any cash
or property received shall be treated as income or as principal and whether any
item of expense shall be charged to the income or the principal ^ amount, and
their determination made in good faith shall be conclusive upon the
Shareholders. In the case of stock dividends received, the Trustees shall have
full discretion to determine, in the light of the particular circumstances, how
much if any of the value thereof shall be treated as income, the balance, if
any, to be treated as principal.
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<PAGE>
Section 7.5. Power to Modify Foregoing Procedures.
Notwithstanding any of the foregoing provisions of this Article VII,
the Trustees may prescribe, in their absolute discretion, such other bases and
times for determining the per Share net asset value or net income, or the
declaration and payment of dividends and distributions as they may deem
necessary or desirable.
ARTICLE VIII
DURATION; TERMINATION OF TRUST;
AMENDMENT; MERGERS, ETC.
Section 8.1. ^ Duration.
^ The Trust shall continue without limitation of time but subject to
the provisions of this Article VIII.
Section 8.2. Termination of Trust.^
(a) The Trust or any Series of the Trust may be terminated by an
instrument in writing signed by a majority of the Trustees, or by the
affirmative vote of the holders of a majority of the Shares of the Trust or
Series outstanding and entitled to vote^ at any meeting of Shareholders. Upon
the termination of the Trust or any Series,
(i) ^ the Trust or any Series 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 or Series and all of the powers of the Trustees under this
Declaration shall continue until the affairs of the Trust or Series
shall have been wound up, including the power to fulfill or discharge
the contracts of the Trust or Series, collect its assets, sell, convey,
assign, exchange, transfer or otherwise dispose of all or any part of
the remaining Trust Property or property of the Series 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; and
(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 property of the
Series, in cash or in kind or partly each, among the Shareholders of
the Trust or Series according to their respective rights.
(b) After termination of the Trust or any Series and distribution to
the Shareholders 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, and the Trustees shall thereupon be
discharged from all further liabilities and duties hereunder, and the rights and
interests of all Shareholders of the Trust or Series shall thereupon cease.
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<PAGE>
Section 8.3. Amendment Procedure.^
(a) This Declaration may be amended by a vote of the holders of a
majority of the Shares outstanding and entitled to vote. Amendments shall be
effective upon the taking of action as provided in this section or at such later
time as shall be specified in the applicable vote or instrument. The Trustees
may also amend this Declaration without the vote or consent of Shareholders if
they deem it necessary to conform this Declaration to the requirements of
applicable federal or state laws or regulations or the requirements of the
regulated investment company provisions of the Internal Revenue Code (including
those provisions of such Code relating to the retention of the exemption from
federal income tax with respect to dividends paid by the Trust out of interest
income received on Municipal Bonds), 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 Shareholders if they deem it necessary or desirable 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 make any other
changes in the Declaration which do not materially adversely affect the rights
of Shareholders hereunder.
(b) ^ No amendment may be made under this Section 8.3 which would
change any rights with respect to any Shares of the Trust or Series by reducing
the amount payable thereon upon liquidation of the Trust or Series or by
diminishing or eliminating any voting rights pertaining thereto, except with the
vote or consent of the holders of two-thirds of the Shares of the Trust or
Series outstanding and entitled to vote. Nothing contained in this Declaration
shall permit the amendment of this Declaration to impair the exemption from
personal liability of the Shareholders, Trustees, officers, employees and agents
of the Trust or to permit assessments upon Shareholders.
(c) A certificate signed by a majority of the Trustees setting forth
an amendment and reciting that it was duly adopted by the Shareholders or by the
Trustees as aforesaid or a copy of the Declaration, as amended, and executed by
a majority of the Trustees, shall be conclusive evidence of such amendment when
lodged among the records of the Trust.
Notwithstanding any other provision hereof, until such time as a
Registration Statement under the Securities Act of 1933, as amended, covering
the first public offering of securities of the Trust shall have become
effective, 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.
Section 8.4. 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 the property of any
Series, including its good will, upon such terms and conditions and for such
consideration when and as authorized ^ by an instrument in writing signed by a
majority of the Trustees.2
_____________________
2 Adoption of this amended and restated Section requires the affirmative vote
of two thirds of the shares of the Trust outstanding and entitled to vote.
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<PAGE>
Section 8.5. ^ Incorporation.
When authorized by an instrument in writing signed by a majority of the
Trustees,3 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 the property of any Series or to carry on any business in
which the Trust or the Series shall directly or indirectly have any interest,
and to sell, convey and transfer the Trust Property or the property of any
Series to any such corporation, trust, association or organization in exchange
for the Shares or securities thereof or otherwise, and to lend money to,
subscribe for the Shares or securities 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 the Series holds or is about to acquire shares or any other interest. The
Trustees may also cause a merger or consolidation between the Trust or any
Series or any successor 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 Shareholders 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 to such organization or entities.
ARTICLE IX
REPORTS TO SHAREHOLDERS
^
The Trustees shall at least semi-annually submit to the Shareholders a
written financial report, which may be included in the Trust's prospectus or
statement of additional information, of the transactions of the Trust, including
financial statements which shall at least annually be certified by independent
public accountants.
ARTICLE X
MISCELLANEOUS
Section 10.1. ^ Filing.
^ This Declaration and any amendment hereto shall be filed in the
office of the Secretary of the Commonwealth of Massachusetts and in such other
places as may be required under the laws of the Commonwealth of Massachusetts
and may also be filed or recorded in such other places as the Trustees deem
appropriate. Unless the amendment is embodied in an instrument signed by a
majority of the Trustees, each amendment filed shall be accompanied by a
certificate signed and acknowledged by a Trustee stating that such action was
duly taken in a manner provided herein. A restated Declaration, integrating into
a single instrument all of the provisions of the Declaration which are then in
effect and operative, may be executed from time to time by a majority of the
Trustees and shall, upon filing with the Secretary of the Commonwealth of
Massachusetts, be conclusive evidence of all amendments contained therein and
may hereafter be referred to in lieu of the original Declaration and the various
amendments thereto. The restated
_____________________
3 Adoption of this amended and restated Section requires the affirmative vote
of two thirds of the shares of the Trust outstanding and entitled to vote.
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<PAGE>
Declaration may include any amendment which the Trustees are empowered to adopt,
whether or not such amendment has been adopted prior to the execution of the
restated Declaration.
Section 10.2. Governing Law.
This Declaration is executed by the Trustees and delivered in the
Commonwealth of Massachusetts and with reference to the internal 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 internal
laws of said State without regard to the choice of law rules thereof.
Section 10.3. 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.
Section 10.4. Reliance by Third Parties.
Any certificate executed by an individual who, according to the records
of the Trust appears to be a Trustee hereunder, certifying to: (a) the number or
identity of Trustees or Shareholders, (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 Shareholders, (d) the fact that the number of Trustees or
Shareholders 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.
Section 10.5. Provisions in Conflict with Law or Regulations.
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, the regulated investment company provisions of the
Internal Revenue Code or with other applicable laws and regulations, the
conflicting provision shall be deemed never to have constituted a part of this
Declaration; 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.
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 provisions in any other jurisdiction or any other provision of this
Declaration in any jurisdiction.
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<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this instrument this
^_______ day of _______________, 1997.
^------------------------------------
as Trustee and not Individually
^------------------------------------
as Trustee and not Individually
------------------------------------
as Trustee and not Individually
------------------------------------
as Trustee and not Individually
------------------------------------
as Trustee and not Individually
THE COMMONWEALTH OF MASSACHUSETTS
County of Suffolk ^_____________ ____, 1997
Then personally appeared the above-named ^___________________ who
acknowledged the foregoing instrument to be ^ his/her free act and deed.
Before me,
------------------------------
Notary Public
My commission expires: __________
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<PAGE>
SCUDDER PORTFOLIO TRUST
AMENDED AND RESTATED DECLARATION OF TRUST
DATED ___________________, 1997 ^
Unless otherwise indicated, with respect to particular provisions, the adoption
of the Amended and Restated Declaration of Trust requires an affirmative vote of
a majority of the outstanding voting securities of the Trust as defined in the
Investment Company Act of 1940, as amended.
<PAGE>
TABLE OF CONTENTS
<PAGE>
AMENDED AND RESTATED DECLARATION OF TRUST
OF
SCUDDER PORTFOLIO TRUST
DATED ^____________, 1997
AMENDED AND RESTATED DECLARATION OF TRUST made ^__________ ____, 1997,
by the undersigned Trustees;
WHEREAS, pursuant to a Declaration of Trust dated September 20, 1984,
as amended and restated, the Trustees^ established a Massachusetts business
trust for the investment and reinvestment of funds contributed thereto, the
beneficial interest in which is divided into transferable shares;^
WHEREAS, the Trustees desire to amend and restate said Declaration of
Trust in its entirety;
NOW, THEREFORE, the Trustees restate the Declaration of Trust as
follows:
ARTICLE I
NAME AND DEFINITIONS
Section 1.1. ^ Name.
The name of the ^ Trust created hereby is the "Scudder Portfolio
Trust".
Section 1.2. Definitions.
Wherever they are used herein, the following terms have the following
respective meanings:
(a) "By-laws" means the By-laws referred to in Section 2.8 hereof, as
from time to time amended. -------
(b) ** 1 ^"Class" means the two or more Classes as may be established
and designated from time to time by the Trustees pursuant to Section 5.13
hereof.
(c) The term "Commission" has the meaning given it in the 1940 Act.
The term "Interested Person" has the meaning given it in the 1940 Act, as
modified by any applicable order or orders of ^ the Commission. Except as
otherwise defined by the Trustees in conjunction with the establishment of any
series of Shares, the term "vote of a majority of the Shares outstanding and
entitled to vote" shall have the same meaning as the term "vote of a majority of
the outstanding voting securities" given it in the 1940 Act.
(d) ^"Custodian" means any Person other than the Trust who has custody
of any Trust Property as required by Section 17(f) of the 1940 Act, but does not
include a system for the central handling of securities described in said
Section 17(f).
(e) "Declaration" means this Amended and Restated Declaration of Trust
as further amended from time to time. Reference in this Declaration of Trust to
"Declaration," "hereof,"
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"herein," and "hereunder" shall be deemed to refer to this Declaration rather
than exclusively to the article or section in which such words appear.
(f) "Distributor" means the party, other than the Trust, to the
contract described in Section 3.1 ----------- hereof.
(g) "His" shall include the feminine and neuter, as well as the
masculine^ genders.
(h) "Investment Adviser" means the party, other than the Trust, to the
contract described in Section 3.2 hereof.
(i) "Municipal Bonds" means obligations issued by or on behalf of
states, territories of the United States and the District of Columbia and their
political subdivisions, agencies and instrumentalities, or other issuers, the
interest from which is exempt from regular Federal income tax.
(j) The "1940 Act" means the Investment Company Act of 1940, as
amended from time to time.
(k) "Person" means and includes individuals, corporations,
partnerships, trusts, associations, joint ventures and other entities, whether
or not legal entities, and governments and agencies and political subdivisions
thereof.
(l) "Series" individually or collectively means the two or more Series
as may be established and designated from time to time by the Trustees pursuant
to Section 5.11 hereof. Unless the context otherwise requires, the term
^"Series" shall include Classes into which shares of the Trust, or of a Series,
may be divided from time to time.
(m) "Shareholder" means a record owner of Outstanding Shares.
(n) "Shares" means the equal proportionate units of interest into
which the beneficial interest in the Trust shall be divided from time to time,
including the Shares of any and all Series and Classes which may be established
by the Trustees and includes fractions of Shares as well as whole Shares.
^"Outstanding Shares" means those ^ Shares shown ^ as of a time and from time to
time on the books of the Trust or its Transfer Agent as then issued and
outstanding, but shall not include Shares which have been redeemed or
repurchased by the Trust and which are at the time held in the Treasury of the
Trust.
(o) "Transfer Agent" means any one or more Persons other than the
Trust who maintains the Shareholder records of the Trust, such as the list of
Shareholders, the number of Shares credited to each account, and the like.
(p) The "Trust"^ means the Scudder Portfolio Trust.
(q) The "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account of the
Trust or the Trustees.
(r) The "Trustees" means the person or persons who has or have signed
this Declaration, so long as he or they shall continue in office in accordance
with the terms hereof, and all other persons who may from time to time be duly
qualified and serving as Trustees in accordance with the provisions of Article
II hereof, and reference herein to a Trustee or the
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Trustees shall refer to such person or persons in this capacity or their
capacities as trustees hereunder.
* 1 MOVED FROM HERE; TEXT NOT SHOWNARTICLE II
TRUSTEES
Section 2.1. ^ General Powers.
The Trustees shall have exclusive and ^ absolute control over the Trust
Property and over the business of the Trust 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 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
both within and 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
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 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.
Section 2.2. Investments.
The Trustees shall have the power:
(a) To operate as and carry on the business of an investment company,
and exercise all the powers necessary and appropriate to the conduct of such
operations.
(b) To invest in, hold for investment, or reinvest in, securities,
including shares of open-end investment companies; common and preferred stocks;
warrants; bonds, debentures, bills, time notes and all other evidences of
indebtedness; negotiable or non-negotiable instruments; government securities,
including securities of any state, municipality or other political subdivision
thereof, or any governmental or quasi-governmental agency or instrumentality;
and money market instruments including bank certificates of deposit, finance
paper, commercial paper, bankers acceptances and all kinds of repurchase
agreements, of any corporation, company, trust, association, firm or other
business organization however established, and of any country, state,
municipality or other political subdivision, or any governmental or
quasi-governmental agency or instrumentality.
(c) To acquire (by purchase, subscription or otherwise), to hold, to
trade in and deal in, to acquire any rights or options to purchase or sell, to
sell or otherwise dispose of, to lend, and to pledge any such securities and to
enter into repurchase agreements and forward foreign currency exchange
contracts, to purchase and sell futures contracts on securities, securities
indices
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and foreign currencies, to purchase or sell options on such contracts, foreign
currency contracts, and foreign currencies and to engage in all types of hedging
and risk management transactions.
(d) To exercise all rights, powers and privileges of ownership or
interest in all securities, repurchase agreements, futures contracts and options
and other assets included in the Trust Property, including the right to vote
thereon and otherwise act with respect thereto and to do all acts for the
preservation, protection, improvement and enhancement in value of all such
assets.
(e) To acquire (by purchase, lease or otherwise) and to hold, use,
maintain, develop and dispose of (by sale or otherwise) any property, real or
personal, including cash, and any interest therein.
(f) To borrow money and in this connection issue notes or other
evidence of indebtedness; to secure borrowings by mortgaging, pledging or
otherwise subjecting as security the Trust Property; to endorse, guarantee, or
undertake the performance of any obligation or engagement of any other Person
and to lend Trust Property.
(g) To aid by further investment any corporation, company,^ trust,
association or firm, any obligation of or interest in which is included in the
Trust Property or in the affairs of which the Trustees have any direct or
indirect interest; to do all acts and things designed to protect, preserve,
improve or enhance the value of such obligation or interest, and to guarantee or
become surety on any or all of the contracts, stocks, bonds, notes, debentures
and other obligations of any such corporation, company, trust, association or
firm.
(h) To 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 the sale of Shares.
(i) To invest, through a transfer of cash, securities and other assets
or otherwise, all or a portion of the Trust Property, or to sell all or a
portion of the Trust Property and invest the proceeds of such sales, in another
investment company that is registered under the 1940 Act.1
(j) In general to carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything necessary, suitable
or proper for the accomplishment of any purpose or the attainment of any object
or the furtherance of any power hereinbefore set forth, either alone or in
association with others, and to do every other act or thing incidental or
appurtenant to or growing out of or connected with the aforesaid business or
purposes, objects or powers.
The foregoing clauses shall be construed both as objects and powers,
and the foregoing enumeration of specific powers shall not be held to limit or
restrict in any manner the general powers of the Trustees.
____________________
1 Adoption of this Section requires the affirmative vote of two thirds of the
shares of the Trust outstanding and entitled to vote.
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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.
Section 2.3. Legal Title.
Legal title to all the Trust Property, including the property of any
Series of the Trust, shall be vested in the Trustees as joint tenants except
that the Trustees shall have power to cause legal title to any Trust Property to
be held by or in the name of one or more of the Trustees, or in the name of the
Trust, or in the name of any other Person as nominee, on such terms as the
Trustees may determine, provided that the interest of the Trust therein is
deemed appropriately protected. The right, title and interest of the Trustees in
the Trust Property and the property of each Series of the Trust shall vest
automatically in each Person who may hereafter become a Trustee. Upon the
termination of the term of office, resignation, removal or death of a Trustee he
shall automatically cease to have any right, title or interest in any of the
Trust Property or the property of any Series of the Trust, and the right, title
and interest of such Trustee in the Trust Property shall vest automatically in
the remaining Trustees. Such vesting and cessation of title shall be effective
whether or not conveyancing documents have been executed and delivered.
Section 2.4. Issuance and Repurchase of Shares.
The Trustees shall have the power to issue, sell, repurchase, redeem,
retire, cancel, acquire, hold, resell, reissue, dispose of, transfer, and
otherwise deal in Shares and, subject to the provisions set forth in Articles VI
and VII and Section 5.11 hereof, to apply to any such repurchase, redemption,
retirement, cancellation or acquisition of Shares any funds or property of the
particular series of the Trust with respect to which such Shares are issued,
whether capital or surplus or otherwise, to the full extent now or hereafter
permitted by the laws of the Commonwealth of Massachusetts governing business
corporations.
Section 2.5. Delegation; Committees.
The Trustees shall have power 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
the names of the Trustees or otherwise as the Trustees may deem expedient, to
the same extent as such delegation is permitted by the 1940 Act.
Section 2.6. Collection and Payment.
The Trustees shall have power to collect all property due to the Trust;
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.
Section 2.7. Expenses.
The Trustees shall have the 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.
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Section 2.8. 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 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 or repeal such By-laws to
the extent such power is not reserved to the Shareholders.
Notwithstanding the foregoing provisions of this Section 2.8 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.
Section 2.9. Miscellaneous Powers.
Subject to Section 5.11^ hereof, 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; (b) enter into joint ventures,
partnerships and any other combinations or associations; (c) remove Trustees or
fill vacancies in or add to their number, elect and remove such officers and
appoint and terminate such agents or employees as they consider appropriate, and
appoint from their own number, and terminate, any one or more committees which
may exercise some or all of the power and authority of the Trustees as the
Trustees may determine; (d) purchase, and pay for out of Trust Property,
insurance policies insuring the Shareholders, Trustees, officers, employees,
agents, investment advisers, distributors, selected dealers 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 constituting negligence, or whether or not the
Trust would have the power to indemnify such Person against such liability; (e)
establish pension, profit-sharing, share purchase, and other retirement,
incentive and benefit plans for any Trustees, officers, employees and agents of
the Trust; (f) to the extent permitted by law, indemnify any person with whom
the Trust has dealings, including the Investment Adviser, Distributor, Transfer
Agent and selected dealers, 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 and the method by which its accounts shall
be kept; and (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.
Section 2.10. Principal Transactions.
Except in transactions not permitted by the 1940 Act or rules and
regulations adopted by the Commission, the Trustees may, on behalf of the Trust,
buy any securities from or sell any securities to, or lend any assets of the
Trust to, any Trustee or officer of the Trust or any firm of which any such
Trustee or officer is a member acting as principal, or have any such dealings
with the Investment Adviser, Distributor or ^ transfer agent or with any
Interested Person ^ or such Person; and the Trust may employ any such Person, or
firm or company in which such Person is
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an Interested Person, as broker, dealer, legal counsel, registrar, transfer
agent, dividend disbursing agent or ^ Custodian upon customary terms.
Section 2.11. Number of Trustees.
The number of Trustees shall initially be one (1), and thereafter shall
be such number as shall be fixed from time to time by a written instrument
signed by a majority of the Trustees^.
Section 2.12. Election and Term.
Except for the Trustees named herein or appointed to fill vacancies
pursuant to Section 2.14 hereof, the Trustees shall be elected by the
Shareholders owning of record a plurality of the Shares voting at a meeting of
Shareholders. Such a meeting shall be held on a date fixed by the Trustees.
Except in the event of resignation or removals pursuant to Section 2.13 hereof,
each Trustee shall hold office until such time as less than a majority of the
Trustees holding office have been elected by Shareholders, and thereafter until
the holding of a Shareholders' meeting as required by the next following
sentence. In such event the Trustees then in office will call a Shareholders'
meeting for the election of Trustees. Except for the foregoing circumstances,
the Trustees shall continue to hold office and may appoint successor Trustees.
Section 2.13. Resignation and Removal.
Any Trustee may resign his trust (without the need for any prior or
subsequent accounting) by an instrument in writing signed by him and delivered
to the other Trustees and such resignation shall be effective upon such
delivery, or at a later date according to the terms of the instrument. Any of
the Trustees may be removed (provided the aggregate number of Trustees after
such removal shall not be less than one) with cause, by the action of two-thirds
of the remaining Trustees. Any Trustee may be removed at any meeting of
Shareholders by vote of two-thirds of the Outstanding Shares. The Trustees shall
promptly call a meeting of the shareholders for the purpose of voting upon the
question of removal of any such Trustee or Trustees when requested in writing so
to do by the holders of not less than ten percent of the Outstanding Shares^
and, in that connection, the Trustees will assist shareholder communications to
the extent provided for in Section 16(c) under the 1940 Act. 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 or property of any series of the Trust held in the name of the
resigning or removed Trustee. Upon the incapacity or death of any Trustee, his
legal representative shall execute and deliver on his behalf such documents as
the remaining Trustees shall require as provided in the preceding sentence.
Section 2.14. Vacancies.
The term of office of a Trustee shall terminate and a vacancy shall
occur in the event of the death, 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, made by a written
instrument signed by a majority of the Trustees then in office. Any such
appointment shall not become effective, however, until the person named in the
written
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instrument of appointment shall have accepted in writing such appointment and
agreed in writing to be bound by the terms of the Declaration. 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 2.14, 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.
Section 2.15. Delegation of Power to Other Trustees.
Any Trustee may, by power of attorney, delegate his power for a period
not exceeding six (6) months at any one time to any other Trustee or Trustees;
provided that in no case shall less than two (2) Trustees personally exercise
the powers granted to the Trustees under this Declaration except as herein
otherwise expressly provided.
Section 2.16. Shareholder Vote, etc. Not Required.
Except to the extent specifically provided to the contrary in this
Declaration, the Trustees may exercise each of the powers granted to them in
this Declaration without the vote, approval or agreement of the Shareholders,
unless such a vote, approval or agreement is required by the 1940 Act or
applicable laws of the Commonwealth of Massachusetts.
ARTICLE III
CONTRACTS
Section 3.1. ^ Distribution Contract.
The Trustees may in their discretion from time to time enter into an
exclusive or non-exclusive underwriting contract or contracts providing for the
sale of the Shares at a price based on the net asset value of a Share, whereby
the Trustees may either agree to sell the Shares to the other party to the
contract or appoint such other party their sales agent for the Shares, and in
either case on such terms and conditions, if any, as may be prescribed in the
By-laws, and such further terms and conditions as the Trustees may in their
discretion determine not inconsistent with the provisions of this Article III or
of the By-laws; and such contract may also provide for the repurchase of the
Shares by such other party as agent of the Trustees.
Section 3.2. Advisory or Management Contract.
The Trustees may in their discretion from time to time enter into an
investment advisory or management contract or separate advisory contracts with
respect to one or more Series whereby the other party to such contract shall
undertake to furnish to the Trust such management, investment advisory,
statistical and research facilities and services and such other facilities and
services, if any, and all upon such terms and conditions as the Trustees may in
their discretion determine, including the grant of authority to such other party
to determine what securities shall be purchased or sold by the Trust and what
portion of its assets shall be uninvested, which authority shall include the
power to make changes in the investments of the Trust or any Series.
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The Trustees may also employ, or authorize the Investment Adviser to
employ, one or more sub-advisers from time to time to perform such of the acts
and services of the Investment Adviser and upon such terms and conditions as may
be agreed upon between the Investment Adviser and such sub-advisers and approved
by the Trustees. Any reference in this Declaration to the Investment Adviser
shall be deemed to include such ^ sub-advisers unless the context otherwise
requires.
Section 3.3. Affiliations of Trustees or Officers, Etc.
The fact that:
(i) any of the Shareholders, Trustees or officers of the
Trust is a shareholder, director, officer, partner, trustee, employee,
manager, adviser or distributor of or for any partnership, corporation,
trust, association or other organization or of or for any parent or
affiliate of any organization, with which a contract of the character
described in Sections 3.1 or 3.2 above or for services as Custodian,
Transfer Agent, accounting agent or disbursing agent or for related
services may have been or may hereafter be made, or that any such
organization, or any parent or affiliate thereof, is a Shareholder of
or has an interest in the Trust, or that
(ii) any partnership, corporation, trust, association or
other organization with which a contract of the character described in
Sections 3.1 or 3.2 above or for services as Custodian, Transfer Agent,
accounting agent or disbursing agent or for related services may have
been or may hereafter be made also has any one or more of such
contracts with one or more other partnerships, corporations, trusts,
associations or other organizations, or has other business or
interests, shall not affect the validity of any such contract or
disqualify any Shareholder, Trustee or officer of the Trust from voting
upon or executing the same or create any liability or accountability to
the Trust or its Shareholders.
Section 3.4. Compliance with 1940 Act.
Any contract entered into pursuant to Sections 3.1 or 3.2 shall be
consistent with and subject to the requirements of Section 15 of the 1940 Act
(including any amendment thereof or other applicable act of Congress hereafter
enacted), as modified by any applicable order or orders of the Commission, with
respect to its continuance in effect, its termination and the method of
authorization and approval of such contract or renewal thereof.
ARTICLE IV
LIMITATIONS OF LIABILITY OF SHAREHOLDERS,
TRUSTEES AND OTHERS
^
Section 4.1. No Personal Liability of Shareholders, Trustees, Etc.
No Shareholder shall be subject to any personal liability whatsoever to
any Person in connection with Trust Property or the acts, obligations or affairs
of the Trust. No Trustee, officer, employee or agent of the Trust shall be
subject to any personal liability whatsoever to any Person, other than to the
Trust or its Shareholders, in connection with Trust Property or the affairs of
the Trust, save only that arising from bad faith, willful misfeasance, gross
negligence or reckless disregard of his duties with respect to such Person; and
all such Persons shall look solely to the Trust Property for satisfaction of
claims of any nature arising in connection with the affairs
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of the Trust. If any Shareholder, Trustee, officer, employee, or agent, as such,
of the Trust, is made a ^ part to any suit or proceeding to enforce any such
liability of the Trust, he shall not, on account thereof, be held to any
personal liability. The Trust shall indemnify and hold each Shareholder harmless
from and against all claims and liabilities, to which such Shareholder may
become subject by reason ^ for his being or having been a Shareholder, and shall
reimburse such Shareholder for all legal and other expenses reasonably incurred
by him in connection with any such claim or liability. The indemnification and
reimbursement required by the preceding sentence shall be made only out of the
assets of the one or more Series of which the Shareholder who is entitled to
indemnification or reimbursement was a Shareholder at the time the act or event
occurred which gave rise to the claim against or liability of said Shareholder.
The rights accruing to a Shareholder under this Section 4.1 shall not impair any
other right to which such Shareholder may be lawfully entitled, nor shall
anything herein contained restrict the right of the Trust to indemnify or
reimburse a Shareholder in any appropriate situation even though not
specifically provided herein.
Section 4.2. Non-Liability of Trustees, Etc.
No Trustee, officer, employee or agent of the Trust shall be liable to
the Trust, its Shareholders, or to any Shareholder, 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 the duties involved in the conduct of his
office.
Section 4.3. Mandatory Indemnification.
(a) ^ Subject to the exceptions and limitations contained in paragraph
(b) below:
(i) every person who is, or has been, a Trustee or officer of
the Trust shall be indemnified by the Trust 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, administrative 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 Shareholders by reason of a final adjudication by a court or other
body before which a proceeding was brought that he engaged in 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;
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(iii) in the event of a settlement or other disposition not
involving a final adjudication as provided in paragraph (b)(i) or
(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; or
(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 Disinterested Trustees acting on the matter
(provided that a majority of the Disinterested Trustees then
in office act on the matter) or (y) written opinion of
independent legal counsel.
(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 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 4.3 may be advanced by the Trust 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 4.3, provided that either:
(i) such undertaking is secured by a surety bond or some
other appropriate security provided by the recipient, or the Trust
shall be insured against losses arising out of any such advances; or
(ii) a majority of the Disinterested Trustees acting on the
matter (provided that a majority of the Disinterested 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 4.3, a "Disinterested Trustee" is one
who is not (i) 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), or (ii) involved in the claim,
action, suit or proceeding.
Section 4.4. No Bond Required of Trustees.
No Trustee shall be obligated to give any bond or other security for
the performance of any of his duties hereunder.
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Section 4.5. No Duty of Investigation; Notice in Trust Instruments,
Etc.
No purchaser, lender, transfer agent or other Person dealing with the
Trustees or any officer, employee or agent of the Trust 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, Share, other security of the Trust or
undertaking, and every ^ other act or thing whatsoever executed in connection
with the Trust shall be conclusively presumed to have been executed or done by
the executors thereof only in their capacity as Trustees under this Declaration
or in their capacity as officers, employees or agents of the Trust. Every
written obligation, contract, instrument, certificate, Share, other security of
the Trust or undertaking made or issued by the Trustees may recite that the same
is executed or made by them not individually, but as Trustees under the
Declaration, and that the obligations of the Trust under any such instrument are
not binding upon any of the Trustees or Shareholders individually, but bind only
the trust estate, and may contain any further recital which they or he may deem
appropriate, but the omission of such recital shall not operate to bind the
Trustees individually. The Trustees shall at all times maintain insurance for
the protection of the Trust Property, its Shareholders, 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.
Section 4.6. Reliance on Experts, Etc.
Each Trustee and officer or employee of the Trust shall, in the
performance of his duties, be fully and completely justified and protected with
regard to any act or any failure to act resulting from reliance in good faith
upon the books of account or other records of the Trust, upon an opinion of
counsel, or upon reports made to the Trust by any of its officers or employees
or by the Investment Adviser, the Distributor, Transfer Agent, selected dealers,
accountants, appraisers 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 V
SHARES OF BENEFICIAL INTEREST
Section 5.1. ^ Beneficial Interest.
The interest of the beneficiaries hereunder shall be divided into
transferable Shares of beneficial interest, all of one class, except as provided
in Section 5.11 and Section 5.13 hereof, par value ^ $.01 per share. The number
of Shares of beneficial interest authorized hereunder is unlimited. All Shares
issued hereunder including, without limitation, Shares issued in connection with
a dividend in Shares or a split of Shares, shall be fully paid and
non-assessable.
Section 5.2. Rights of Shareholders.
The ownership of the Trust Property and the property of each Series of
the Trust of every description and the right to conduct any business ^
herein-before described are vested exclusively in the Trustees, and the
Shareholders shall have no interest therein other than the beneficial interest
conferred by their Shares, and they shall have no right to call for any
partition or division of any property, profits, rights or interests of the Trust
nor can they be called upon to share or
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assume any losses of the Trust or suffer an assessment of any kind by virtue of
their ownership of Shares. The Shares shall be personal property giving only the
rights specifically set forth in this Declaration. The Shares shall not entitle
the holder to preference, preemptive, appraisal, conversion or exchange rights,
except as the Trustees may determine with respect to any Series of Shares.
Section 5.3. Trust Only.
It is the intention of the Trustees to create only the relationship of
Trustee and beneficiary between the Trustees and each Shareholder from time to
time. It is not the intention of the Trustees to create a general partnership,
limited partnership, joint stock association, corporation, bailment or any form
of legal relationship other than a trust. Nothing in this Declaration ^ shall be
construed to make the Shareholders, either by themselves or with the Trustees,
partners or members of a joint stock association.
Section 5.4. Issuance of Shares.
The Trustees in their discretion may, from time to time without vote of
the Shareholders, issue Shares, in addition to the then issued and outstanding
Shares and Shares held in the treasury, 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 Shares, the Trustees may issue fractional Shares and Shares
held in the treasury. The Trustees may from time to time divide or combine the
Shares into a greater or lesser number without thereby changing the
proportionate beneficial interests in the Trust. Contributions to the Trust may
be accepted for, and Shares shall be redeemed as, whole Shares and/or 1/1,000ths
of a Share or integral multiples thereof.
Section 5.5. Register of Shares.
A register shall be kept at the principal office of the Trust or an
office of the Transfer Agent which shall contain the names and addresses of the
Shareholders and the number of Shares held by them respectively and a record of
all transfers thereof. Such register shall be conclusive as to who are the
holders of the Shares and who shall be entitled to receive dividends or
distributions or otherwise to exercise or enjoy the rights of Shareholders. No
Shareholder shall be entitled to receive payment of any dividend or
distribution, nor to have notice given to him as herein or in the By-laws
provided, until he has given his address to the Transfer Agent or such other
officer or agent of the Trustees as shall keep the said register for entry
thereon. It is not contemplated that certificates will be issued for the Shares;
however, the Trustees, in their discretion, may authorize the issuance of share
certificates and promulgate appropriate rules and regulations as to their use.
Section 5.6. Transfer of Shares.
Except as otherwise provided by the Trustees, shares shall be
transferable on the records of the Trust only by the record holder thereof or by
his agent thereunto duly authorized ^, upon delivery to the Trustees or the
Transfer Agent of a duly executed instrument of transfer, together with such
evidence of the genuineness of each such execution and authorization and of
other matters as may reasonably be required. Upon such delivery the transfer
shall be recorded on the register of the Trust. Until such record is made, the
Shareholder of record shall be deemed to be
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the holder of such Shares for all purposes hereunder and neither the Trustees
nor any transfer agent or registrar nor any officer, employee or agent of the
Trust shall be affected by any notice of the proposed transfer.
Any person becoming entitled to any Shares in consequence of the death,
bankruptcy, or incompetence of any Shareholder, or otherwise by operation of
law, shall be recorded on the register of Shares as the holder of such Shares
upon production of the proper evidence thereof to the Trustees or the Transfer
Agent, but until such record is made, the Shareholder of record shall be deemed
to be the holder of such Shares for all purposes hereunder and neither the
Trustees nor any Transfer Agent or registrar nor any officer or agent of the
Trust shall be affected by any notice of such death, bankruptcy or incompetence,
or other operation of law.
Section 5.7. Notices, Reports.
Any and all notices to which any Shareholder may be entitled and any
and all communications shall be deemed duly served or given if mailed, postage
prepaid, addressed to any Shareholder of record at his last known address as
recorded on the register of the Trust. A notice of a meeting, an annual report
and any other communication to Shareholders need not be sent to a Shareholder
(i) if an annual report and a proxy statement for two consecutive shareholder
meetings have been mailed to such Shareholder's address and have been returned
as undeliverable, (ii) if all, and at least two, checks (if sent by first class
mail) in payment of dividends on Shares during a twelve-month period have been
mailed to such Shareholder's address and have been returned as undeliverable or
(iii) in any other case in which a proxy statement concerning a meeting of
security holders is not required to be given pursuant to the Commission's proxy
rules as from time to time in effect under the Securities Exchange Act of 1934.
However, delivery of such proxy statements, annual reports and other
communications shall resume if and when such Shareholder delivers or causes to
be delivered to the Trust written notice setting forth such Shareholder's then
current address.
Section 5.8. Treasury Shares.
Shares held in the treasury shall, until reissued pursuant to Section
5.4, not confer any voting rights on the Trustees, nor shall such Shares be
entitled to any dividends or other distributions declared with respect to the
Shares.
Section 5.9. Voting Powers.
The Shareholders shall have power to vote only (i) for the election of
Trustees as provided in Section 2.12; (ii) for the removal of Trustees as
provided in Section 2.13; (iii) with respect to any ^ amendment of this
Declaration to the extent and as provided in Section 8.3; ^(iv) to the same
extent as the stockholders of Massachusetts business corporation as to whether
or not a court action, proceeding or claim should or should not be brought or
maintained derivatively or as a class action on behalf of the Trust or ^ any
Series or Class thereof or the Shareholders (provided, however, that a
Shareholder of a particular Series or Class shall not be entitled to bring a
derivative or class action on behalf of any other Series or Class (or
Shareholder of any other Series or Class) of the Trust); and (v)2 with respect
to such additional matters relating to the Trust as may be required by this
Declaration, the By-laws or any registration of the
____________________
2 Adoption of this amended and restated Section requires the affirmative vote
of two thirds of the shares of the Trust outstanding and entitled to vote.
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Trust as an investment company under the 1940 Act with the Commission (or any
successor agency) or as the Trustees may consider necessary or desirable. Each
whole Share shall be entitled to one vote as to any matter on which it is
entitled to vote and each fractional Share shall be entitled to a proportionate
fractional vote, except that the Trustees may, in conjunction with the
establishment of any Series or Class of Shares, establish or reserve the right
to establish conditions under which the several Series or Classes shall have
separate voting rights or^ no voting rights. There shall be no cumulative voting
in the election of Trustees. Until Shares are issued, the Trustees may exercise
all rights of Shareholders and may take any action required by law, this
Declaration or the By-laws to be taken by Shareholders. The By-laws may include
further provisions ^ for Shareholders' votes and meetings and related matters.
Section 5.10. Meetings of Shareholders.
Meetings of Shareholders may be called at any time by the President,
and shall be called by the President and Secretary at the request in writing or
by resolution, of a majority of Trustees, or at the written request of the
holder or holders of ten percent (10%) or more of the total number of Shares
then issued and outstanding of the Trust entitled to vote at such meeting. Any
such request shall state the purpose of the proposed meeting.
Section 5.11. Series Designation.
The Trustees, in their discretion, may authorize the division of Shares
into two or more Series, and the different Series 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; provided,
that all Shares shall be identical except that there may be variations so fixed
and determined between different Series as to investment objective, purchase
price, allocation of expenses, right of redemption, special and relative rights
as to dividends and on liquidation, conversion rights, and conditions under
which the several Series shall have separate voting rights. All references to
Shares in this Declaration shall be deemed to be Shares of any or all ^ Series
as the context may require.
(a) ^ All provisions herein relating to the Trust shall apply equally
to each Series of the Trust except as the context requires otherwise.
(b) The number of authorized Shares and the number of Shares of each
Series that may be issued shall be unlimited. The Trustees may classify or
reclassify any unissued Shares or any Shares previously issued and reacquired of
any Series into one or more Series that may be established and designated from
time to time. The Trustees may hold as treasury Shares (of the same or some
other Series), reissue for such consideration and on such terms as they may
determine, or cancel any Shares of any Series reacquired by the Trust at their
discretion from time to time.
(c) All consideration received by the Trust for the issue or sale of
Shares of a particular Series, together with all assets in which such
consideration is invested or reinvested, all income, earnings, profits, and
proceeds thereof, including any proceeds derived from the sale, exchange or
liquidation of such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, shall
irrevocably belong to that Series for all purposes, subject only to the rights
of creditors of such Series and except as may otherwise be required by
applicable 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, the Trustees shall
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allocate them among any one or more of the Series 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 ^ Shareholders of all Series for all
purposes.
(d) The assets belonging to each particular Series shall be charged
with the liabilities of the Trust in respect of that Series and with all
expenses, costs, charges and reserves attributable to that Series, and any
general liabilities, expenses, costs, charges or reserves of the Trust which are
not readily identifiable as belonging to any particular Series shall be
allocated and charged by the Trustees to and among any one or more of the Series
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 Shareholders of all ^ Series 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 Shareholders. The assets
of a particular Series of the Trust shall, under no circumstances, be charged
with liabilities attributable to any other Series of the Trust. All persons
extending credit to, or contracting with or having any claim against a
particular Series of the Trust shall look only to the assets of that particular
Series for payment of such credit, contract or claim. No Shareholder or former
Shareholder of any Series shall have any claim on or right to any assets
allocated or belonging to any other ^ Series.
(e) Each Share of a Series of the Trust shall represent a beneficial
interest in the net assets of such Series. Each holder of Shares of a Series
shall be entitled to receive his pro rata share of distributions of income and
capital gains made with respect to such Series, except as provided in Section
5.13 hereof. Upon redemption of his Shares or indemnification for liabilities
incurred by reason of his being or having been a Shareholder of a Series, such ^
Shareholder shall be paid solely out of the funds and property of such Series of
the Trust. Upon liquidation or termination of a Series of the Trust,
Shareholders of such Series shall be entitled to receive a pro rata share of the
net assets of such Series, except as provided in Section 5.13 hereof. A
Shareholder 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
Shareholders of any other Series of the Trust.
(f) The establishment and designation of any Series of Shares 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 as otherwise provided in such instrument. The
Trustees may by an instrument executed by a majority of their number abolish any
Series and the establishment and designation thereof. Except as otherwise
provided in this Article V, the Trustees shall have the power to determine the
designations, preferences, privileges, limitations and rights, of each class and
Series of Shares. Each instrument referred to in this paragraph shall have the
status of an amendment to this Declaration.
Section 5.12. Assent to Declaration of Trust.
Every Shareholder, by virtue of having become a shareholder, shall be
held to have expressly assented and agreed to the terms hereof and to have
become a party hereto.
Section 5.13. Class Designation.
The Trustees, in their discretion, may authorize the division of the
Shares of the Trust, or, if any Series be established, the Shares of any Series,
into two or more Classes, and the different
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Classes shall be established and designated, and the variations in the relative
rights and preferences as between the different Classes shall be fixed and
determined, by the Trustees; provided, that all Shares of the Trust or of any
Series shall be identical to all other Shares of the Trust or the same Series,
as the case may be, except that there may be variations between different ^
Classes as to allocation of expenses, right of redemption, special and relative
rights as to dividends and on liquidation, conversion rights, and conditions
under which the several Classes shall have separate voting rights. All
references to Shares in this Declaration shall be deemed to be Shares of any or
all Classes as the context may require.
If the Trustees shall divide the Shares of the Trust or any Series into two or
more Classes, the following provisions shall be applicable:
(a) All provisions herein relating to the Trust, or any Series of the
Trust, shall apply equally to each Class of Shares of the Trust or of any Series
of the Trust, except as the context requires otherwise.
(b) The number of Shares of each Class that may be issued shall be
unlimited. The Trustees may classify or reclassify any ^ Shares or any Series of
any Shares into one or more Classes that may be established and designated from
time to time. The Trustees may hold as treasury Shares (of the same or some
other Class), reissue for such consideration and on such terms as they may
determine, or cancel any Shares of any Class reacquired by the Trust at their
discretion from time to time.
(c) Liabilities, expenses, costs, charges and reserves related to the
distribution of, and other identified expenses that should ^ properly be
allocated to, the Shares of a particular Class may be charged to and borne
solely by such Class and the bearing of expenses solely by a Class of Shares may
be appropriately reflected (in a manner determined by the Trustees) and cause
differences in the net asset value attributable to, and the dividend, redemption
and liquidation rights of, the Shares of different ^ classes. Each allocation of
liabilities, expenses, costs, charges and reserves by the Trustees shall be
conclusive and binding upon the Shareholders of all Classes for all purposes.
(d) The establishment and designation of any Class of Shares 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 Class, or as otherwise provided in such
instrument. The Trustees may, by an instrument executed by a majority of their
number, abolish any Class and the establishment and designation thereof. Each
instrument referred to in this paragraph shall have the status of an amendment
to this Declaration.
ARTICLE VI
REDEMPTION AND REPURCHASE OF SHARES
Section 6.1. ^ Redemption of Shares.
All Shares of the Trust shall be redeemable, at the redemption price
determined in the manner set out in this Declaration. Redeemed or repurchased
Shares may be resold by the Trust.
The Trust shall redeem the Shares upon the appropriately verified
written application of the record holder thereof (or upon such other form of
request as the Trustees may determine) at
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such office or agency as may be designated from time to time for that purpose in
the Trust's then effective registration statement under the Securities Act of
1933. The Trustees may from time to time specify additional conditions, not
inconsistent with the 1940 Act, regarding the redemption of Shares in the
Trust's then effective registration statement under the Securities Act of 1933.
Section 6.2. Price.
Shares shall be redeemed at ^ their net asset value, which may be
reduced by any redemption fee authorized by the Trustees, determined as set
forth in Section 7.1 hereof as of such time as the Trustees shall have
theretofore prescribed by resolution. In the absence of such resolution, the
redemption price of Shares deposited shall be the net asset value of such Shares
next determined as set forth in Section 7.1 hereof after receipt of such
application.
Section 6.3. Payment.
Payment for such Shares shall be made in cash or in property out of the
assets of the relevant ^ Series of the Trust to the Shareholder of record at
such time and in the manner, not inconsistent with the 1940 Act or other
applicable laws, as may be specified from time to time in the Trust's then
effective registration statement under the Securities Act of 1933, subject to
the provisions of Section 6.4 hereof.
Section 6.4. Effect of Suspension of Determination of Net Asset
Value.
If, pursuant to Section 6.9 hereof, the Trustees shall declare a
suspension of the determination of net asset value, the rights of Shareholders
(including those who shall have applied for redemption pursuant to Section 6.1
hereof but who shall not yet have received payment) to have Shares redeemed and
paid for by the Trust shall be suspended until the termination of such
suspension is declared. Any record holder who shall have his redemption right so
suspended may, during the period of such suspension, by appropriate written
notice of revocation at the office or agency where application was made, revoke
any application for redemption not honored and withdraw any certificates on
deposit. The redemption price of Shares for which redemption applications have
not been revoked shall be the net asset value of such Shares next determined as
set forth in Section 7.1 after the termination of such suspension, and payment
shall be made within seven (7) days after the date upon which the application
was made plus the period after such application during which the determination
of net asset value was suspended.
Section 6.5. Repurchase by Agreement.
The Trust may repurchase Shares directly, or through the Distributor or
another agent designated for the purpose, by agreement with the owner thereof at
a price not exceeding the net asset value per ^ Share determined as of the time
when the purchase or contract of purchase is made or the net asset value as of
any time which may be later determined pursuant to Section 7.1 hereof, provided
payment is not made for the Shares prior to the time as of which such net asset
value is determined.
Section 6.6. Redemption of Shareholder's Interest.
The Trust shall have the right at any time without prior notice to the
^ Shareholder to redeem Shares of any ^ Shareholder for their then current net
asset value per ^ Share if
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(a) at such time the ^ Shareholder owns Shares having an aggregate net
asset value of less than an amount set from time to time by the Trustees subject
to such terms and conditions as the Trustees may approve, and subject to the
Trust's giving general notice to all ^ Shareholders of its intention to avail
itself of such right, either by publication in the Trust's registration
statement, ^ if any, or by such other means as the Trustees may determine, or
(b) The Trustees believe that it is in the best interest of the Trust
to do so because of prior involvement by the Shareholder in fraudulent acts
relating to securities transactions.
Section 6.7. Redemption of Shares in Order to Qualify as Regulated
Investment Company; Disclosure of Holding.
If the Trustees shall, at any time and in good faith, be of the opinion
that direct or indirect ownership of Shares or other securities of the Trust has
or may become concentrated in any Person to an extent which would disqualify any
Series of the Trust as a regulated investment company under the Internal Revenue
Code, then the Trustees shall have the power by lot or other means deemed
equitable by them (i) to call for redemption by any such Person a number, or
principal amount, of Shares or other securities of the Trust sufficient to
maintain or bring the direct or indirect ownership of Shares or other securities
of the Trust into conformity with the requirements for such qualification and
(ii) to refuse to transfer or issue Shares or other securities of the Trust to
any Person whose acquisition of the Shares or other securities of the Trust in
question would result in such disqualification. The redemption shall be effected
at the redemption price and in the manner provided in Section 6.1.
The holders of Shares or other securities of the Trust shall upon
demand disclose to the Trustees in writing such information with respect to
direct and indirect ownership of Shares or other securities of the Trust as the
Trustees deem necessary to comply with the provisions of the Internal Revenue
Code, or to comply with the requirements of any other taxing authority.
Section 6.8. Reductions in Number of Outstanding Shares Pursuant to
Net Asset Value Formula.
The Trust may also reduce the number of Outstanding Shares pursuant to
the provisions of Section 7.3.
Section 6.9. Suspension of Right of Redemption.
The Trust may declare a suspension of the right of redemption or
postpone the date of payment or redemption for the whole or any part of any
period (i) during which the New York Stock Exchange is closed other than
customary week-end and holiday closings, (ii) during which trading on the New
York Stock Exchange is restricted, (iii) during which an emergency exists as a
result of which disposal by the Trust of securities owned by it is not
reasonably practicable or it is not reasonably practicable for the Trust fairly
to determine the value of its net assets, or (iv) during any other period when
the Commission may for the protection of Shareholders of the Trust by order
permit suspension of the right of redemption or postponement of the date of
payment or redemption; provided that applicable rules and regulations of the
Commission shall govern as to whether the conditions prescribed in (ii), (iii),
or (iv) exist. Such suspension shall take effect at such time as the Trust shall
specify but not later than the close of business on the business day next
following the declaration of suspension, and thereafter there shall be no right
of redemption or payment on redemption until the Trust shall declare the
suspension at an end, except that the
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suspension shall terminate in any event on the first day on which said stock
exchange shall have reopened or the period specified in (ii) or (iii) shall have
expired (as to which in the absence of an official ruling by the Commission, the
determination of the Trust shall be conclusive). In the case of a suspension of
the right of redemption, a Shareholder may either withdraw his request for
redemption or receive payment based on the net ^ asset value existing after the
termination of the suspension.
ARTICLE VII
DETERMINATION OF NET ASSET VALUE,
NET INCOME AND DISTRIBUTIONS
Section 7.1. Net Asset ^ Value.
The value of the assets of the Trust or any Series of the Trust shall
be determined by appraisal of the securities of the Trust or allocated to such
Series, such appraisal to be on the basis of ^ such method as shall be deemed to
reflect the fair value thereof, determined in good faith by or under the
direction of the Trustees. From the total value of said assets, there shall be
deducted all indebtedness, interest, taxes, payable or accrued, including
estimated taxes on unrealized book profits, expenses and management charges
accrued to the appraisal date, net income determined and declared as a
distribution and all other items in the nature of liabilities attributable to
the Trust or such Series or Class thereof which shall be deemed appropriate. The
net asset value of a Share shall be determined by dividing the net asset value
of the Class, or, ^ if no Class has been established, of the Series, or, ^ if no
Series has been established, of the Trust, by the number of Shares of that
Class, or Series, or of the Trust, as applicable, outstanding. The net asset
value of Shares of the Trust or any Class or Series of the Trust shall be
determined pursuant to the procedure and methods prescribed or approved by the
Trustees in their discretion and as set forth in the most recent Registration
Statement of the Trust as filed with the Securities and Exchange Commission
pursuant to the requirements of the Securities Act of 1933, as amended, the ^
1940 Act, as amended, and the Rules thereunder. The net asset value of the
Shares shall be determined at least once on each business day, as of the close
of trading on the New York Stock Exchange or as of such other time or times as
the Trustees shall determine. The power and duty to make the daily calculations
may be delegated by the Trustees to the Investment Adviser, the Custodian, the
Transfer Agent or such other Person as the Trustees may determine by resolution
or by approving a contract which delegates such duty to another Person. The
Trustees may suspend the daily determination of net asset value to the extent
permitted by the 1940 Act.
Section 7.2. Distributions to Shareholders.
The Trustees shall from time to time distribute ratably among the
Shareholders of the Trust or a Series such proportion of the net profits,
surplus (including paid-in surplus), capital, or assets of the Trust or such
Series held by the Trustees as they may deem proper. Such distributions may be
made in cash or property (including without limitation any type of obligations
of the Trust or such Series or any assets thereof), and the Trustees may
distribute ratably among the Shareholders additional Shares of the Trust or such
Series issuable hereunder in such manner, at such times, and on such terms as
the Trustees may deem proper. Such distributions may be among the Shareholders
of record at the time of declaring a distribution or among the Shareholders of
record at such other date or time or dates or times as the Trustees shall
determine. The Trustees may in their discretion determine that, solely for the
purposes of such distributions, Outstanding Shares shall exclude Shares for
which orders have been placed
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subsequent to a specified time on the date the distribution is declared or on
the next preceding day if the distribution is declared as of a day on which
Boston banks are not open for business, all as described in the registration
statement under the Securities Act of 1933. 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 the Series or to meet obligations of the Trust or the
Series, 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. The Trustees may
adopt and offer to Shareholders such dividend reinvestment plans, cash dividend
payout plans or related plans as the Trustees shall deem appropriate. The above
provisions may be modified to the extent required by a plan adopted by the
Trustees to establish Classes of Shares of the Trust or of a Series.
Inasmuch as the computation of net income and gains for Federal income
tax purposes may vary from the computation thereof on the books, the above
provisions shall be interpreted to give the Trustees the power in their
discretion to distribute for any fiscal year as ordinary dividends and as
capital gains distributions, respectively, additional amounts sufficient to
enable the Trust or the Series to avoid or reduce liability for taxes.
Section 7.3. Determination of Net Income; Constant Net Asset Value;
Reduction of Outstanding Shares.
Subject to Section 5.11 and Section 5.13 hereof, the net income of the
Trust or any Series shall be determined in such manner as the Trustees shall
provide by resolution. Expenses of the Trust or a Series, including the advisory
or management fee, shall be accrued each day. Such net income may be determined
by or under the direction of the Trustees as of the close of trading on the New
York Stock Exchange on each day on which such Exchange is open or as of such
other time or times as the Trustees shall determine, and, except as provided
herein, all the net income of the Trust or any Series, as so determined, may be
declared as a dividend on the Outstanding Shares of the Trust or such Series.
If, for any reason, the net income of the Trust or any Series, determined at any
time is a negative amount, the Trustees shall have the power with respect to the
Trust or such Series (i) to offset each Shareholder's pro rata share of such
negative amount from the accrued dividend account of such Shareholder, or (ii)
to reduce the number of Outstanding Shares of the Trust or such Series by
reducing the number of Shares in the account of such Shareholder by that number
of full and fractional Shares which represents the amount of such excess
negative net income, or (iii) to cause to be recorded on the books of the Trust
or such Series an asset account in the amount of such negative net income, which
account may be reduced by the amount, provided that the same shall thereupon
become the property of the Trust or such Series with respect to the Trust or
such Series and shall not be paid to any Shareholder, of dividends declared
thereafter upon the Outstanding Shares of the Trust or such Series on the day
such negative net income is experienced, until such asset account is reduced to
zero; or (iv) to combine the methods described in clauses (i) and (ii) and (iii)
of this sentence, in order to cause the net asset value per Share of the Trust
or such Series to remain at a constant amount per Outstanding Share immediately
after each such determination and declaration. The Trustees shall also have the
power to fail to declare a dividend out of net income for the purpose of causing
the net asset value per Share to be increased to a constant amount. The Trustees
shall not be required to adopt, but may at any time adopt, discontinue or amend
the practice of maintaining the net asset value per Share of the Trust or a
Series at a constant amount.
Section 7.4. Allocation Between Principal and Income.
The Trustees shall have full discretion to determine whether any cash
or property received shall be treated as income or as principal and whether any
item of expense shall be charged to the
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<PAGE>
income or the principal ^ amount, and their determination made in good faith
shall be conclusive upon the Shareholders. In the case of stock dividends
received, the Trustees shall have full discretion to determine, in the light of
the particular circumstances, how much if any of the value thereof shall be
treated as income, the balance, if any, to be treated as principal.
Section 7.5. Power to Modify Foregoing Procedures.
Notwithstanding any of the foregoing provisions of this Article VII,
the Trustees may prescribe, in their absolute discretion, such other bases and
times for determining the per Share net asset value or net income, or the
declaration and payment of dividends and distributions as they may deem
necessary or desirable.
ARTICLE VIII
DURATION; TERMINATION OF TRUST;
AMENDMENT; MERGERS, ETC.
^
Section 8.1. Duration.
The Trust shall continue without limitation of time but subject to the
provisions of this Article VIII.
Section 8.2. Termination of Trust.
(a) ^ The Trust or any Series of the Trust may be terminated by an
instrument in writing signed by a majority of the Trustees, or by the
affirmative vote of the holders of a majority of the Shares of the Trust or
Series outstanding and entitled to vote^ at any meeting of Shareholders. Upon
the termination of the Trust or any Series,
(i) the Trust or any Series 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 or Series and all of the powers of the Trustees under this
Declaration shall continue until the affairs of the Trust or Series
shall have been wound up, including the power to fulfill or discharge
the contracts of the Trust or Series, collect its assets, sell, convey,
assign, exchange, transfer or otherwise dispose of all or any part of
the remaining Trust Property or property of the Series 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; and
(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 property of the
Series, in cash or in kind or partly each, among the Shareholders of
the Trust or Series according to their respective rights.
(b) After termination of the Trust or any Series and distribution to
the Shareholders 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, and the Trustees shall
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<PAGE>
thereupon be discharged from all further liabilities and duties hereunder, and
the rights and interests of all Shareholders of the Trust or Series shall
thereupon cease.
Section 8.3. Amendment Procedure.
(a) This Declaration may be amended by a vote of the holders of a
majority of the Shares outstanding and entitled to vote. Amendments shall be
effective upon the taking of action as provided in this section or at such later
time as shall be specified in the applicable vote or instrument. The Trustees
may also amend this Declaration without the vote or consent of Shareholders if
they deem it necessary to conform this Declaration to the requirements of
applicable federal or state laws or regulations or the requirements of the
regulated investment company provisions of the Internal Revenue Code (including
those provisions of such Code relating to the retention of the exemption from
federal income tax with respect to dividends paid by the Trust out of interest
income received on Municipal Bonds), 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 Shareholders if they deem it necessary or desirable 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 make any other
changes in the Declaration which do not materially adversely affect the rights
of Shareholders hereunder.
(b) No amendment may be made under this Section 8.3 which would change
any rights with respect to any Shares of the Trust or Series by reducing the
amount payable thereon upon liquidation of the Trust or Series or by diminishing
or eliminating any voting rights pertaining thereto, except with the vote or
consent of the holders of two-thirds of the Shares of the Trust or Series
outstanding and entitled to vote. Nothing contained in this Declaration shall
permit the amendment of this Declaration to impair the exemption from personal
liability of the Shareholders, Trustees, officers, employees and agents of the
Trust or to permit assessments upon Shareholders.
(c) A certificate signed by a majority of the Trustees setting forth
an amendment and reciting that it was duly adopted by the Shareholders or by the
Trustees as aforesaid or a copy of the Declaration, as amended, and executed by
a majority of the Trustees, shall be conclusive evidence of such amendment when
lodged among the records of the Trust.
Notwithstanding any other provision hereof, until such time as a
Registration Statement under the Securities Act of 1933, as amended, covering
the first public offering of securities of the Trust shall have become
effective, 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.
Section 8.4. 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 the property of any
Series, including its good will, upon such terms and conditions and for such
consideration when and as authorized ^ by an instrument in writing signed by a
majority of the Trustees.3
____________________
3 Adoption of this amended and restated Section requires the affirmative vote
of two thirds of the shares of the Trust outstanding and entitled to vote.
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<PAGE>
Section 8.5. ^ Incorporation.
^ When authorized by an instrument in writing signed by a majority of
the Trustees,4 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 the property of any Series or to carry on any business in
which the Trust or the Series shall directly or indirectly have any interest,
and to sell, convey and transfer the Trust Property or the property of any
Series to any such corporation, trust, association or ^ organization in exchange
for the Shares or securities thereof or otherwise, and to lend money to,
subscribe for the Shares or securities 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 the Series holds or is about to acquire shares or any other interest. The
Trustees may also cause a merger or consolidation between the Trust or any
Series or any successor 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 Shareholders 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 to such organization or entities.
ARTICLE IX
REPORTS TO SHAREHOLDERS
Section 9. ^ The Trustees shall at least semi-annually submit
to the Shareholders a written financial report, which may be included in the
Trust's prospectus or statement of additional information, of the transactions
of the Trust, including financial statements which shall at least annually be
certified by independent public accountants.
ARTICLE X
MISCELLANEOUS
Section 10.1. ^ Filing.
This Declaration and any amendment hereto shall be filed in the office
of the Secretary of the Commonwealth of Massachusetts and in such other places
as may be required under the laws of the Commonwealth of Massachusetts and may
also be filed or recorded in such other places as the Trustees deem appropriate.
Unless the amendment is embodied in an instrument signed by a majority of the
Trustees, each amendment filed shall be accompanied by a certificate signed and
acknowledged by a Trustee stating that such action was duly taken in a manner
provided herein. A restated Declaration, integrating into a single instrument
all of the provisions of the Declaration which are then in effect and operative,
may be executed from time to time by a majority of the Trustees and shall, upon
filing with the Secretary of the Commonwealth of Massachusetts, be conclusive
evidence of all amendments contained therein and may hereafter be referred to in
lieu of the original Declaration and the various amendments thereto. The
restated Declaration may
____________________
4 Adoption of this amended and restated Section requires the affirmative vote
of two thirds of the shares of the Trust outstanding and entitled to vote.
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<PAGE>
include any amendment which the Trustees are empowered to adopt, whether or not
such amendment has been adopted prior to the execution of the restated
Declaration.
Section 10.2. Governing Law.
This Declaration is executed by the Trustees and delivered in the
Commonwealth of Massachusetts and with reference to the internal 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 internal
laws of said State without regard to the choice of law rules thereof.
Section 10.3. 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.
Section 10.4. Reliance by Third Parties.
Any certificate executed by an individual who, according to the records
of the Trust appears to be a Trustee hereunder, certifying to: (a) the number or
identity of Trustees or Shareholders, (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 Shareholders, (d) the fact that the number of Trustees or
Shareholders 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.
Section 10.5. Provisions in Conflict with Law or Regulations.
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, the regulated investment company provisions of the
Internal Revenue Code or with other applicable laws and regulations, the
conflicting provision shall be deemed never to have constituted a part of this
Declaration; 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.
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 provisions in any other jurisdiction or any other provision of this
Declaration in any jurisdiction.
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<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this instrument this
^_______ day of _______________, 1997.
^------------------------------------
as Trustee and not Individually
------------------------------------
as Trustee and not Individually
------------------------------------
as Trustee and not Individually
------------------------------------
as Trustee and not Individually
------------------------------------
as Trustee and not Individually
THE COMMONWEALTH OF MASSACHUSETTS
County of Suffolk ^_____________ ____, 1997
Then personally appeared the above-named ^___________________ who
acknowledged the foregoing instrument to be ^ his/her free act and deed.
Before me,
------------------------------
Notary Public
My commission expires: ^__________
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<PAGE>
SCUDDER U.S. TREASURY MONEY FUND
AMENDED AND RESTATED DECLARATION OF TRUST
DATED ___________________, 1997 ^
Unless otherwise indicated, with respect to particular provisions, the adoption
of the Amended and Restated Declaration of Trust requires an affirmative vote of
a majority of the outstanding voting securities of the Trust as defined in the
Investment Company Act of 1940, as amended.
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I.....................................................................1^
Section 1.1. Name....................................................1
Section 1.2. Definitions.............................................1
ARTICLE II....................................................................3^
Section 2.1. General Powers..........................................3^
Section 2.2. Investments.............................................3
Section 2.3. Legal Title.............................................5
Section 2.4. Issuance and Repurchase of Shares.......................5
Section 2.5. Delegation; Committees..................................5
Section 2.6. Collection and Payment..................................5
Section 2.7. Expenses................................................6
Section 2.8. Manner of Acting; By-laws...............................6
Section 2.9. Miscellaneous Powers....................................6
Section 2.10. Principal Transactions.................................7^
Section 2.11. Number of Trustees.....................................7
Section 2.12. Election and Term......................................7
Section 2.13. Resignation and Removal................................7
Section 2.14. Vacancies..............................................8^
Section 2.15. Delegation of Power to Other Trustees..................8
Section 2.16. Shareholder Vote, etc..................................8
ARTICLE III...................................................................8^
Section 3.1. Distribution Contract...................................8
Section 3.2. Advisory or Management Contract.........................9
Section 3.3. Affiliations of Trustees or Officers, Etc...............9
Section 3.4. Compliance with 1940 Act................................9
ARTICLE IV...................................................................10
Section 4.1. No Personal Liability of Shareholders, Trustees,
Etc......................................10^
Section 4.2. Non-Liability of Trustees, Etc.........................10
Section 4.3. Mandatory Indemnification..............................10
Section 4.4. No Bond Required of Trustees...........................12
Section 4.5. No Duty of Investigation; Notice in Trust
Instruments, Etc.....................................12
Section 4.6. Reliance on Experts, Etc...............................12^
ARTICLE V....................................................................13^
Section 5.1. Beneficial Interest....................................13
Section 5.2. Rights of Shareholders.................................13^
Section 5.3. Trust Only.............................................13
Section 5.4. Issuance of Shares.^...................................13
Section 5.5. Register of Shares.....................................14
Section 5.6. Transfer of Shares.^...................................14
Section 5.7. Notices, Reports.......................................14
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<PAGE>
Section 5.8. Treasury Shares........................................15
Section 5.9. Voting Powers..........................................15
Section 5.10. Meetings of Shareholders..............................15
Section 5.11. Series Designation....................................15
Section 5.12. Assent to Declaration of Trust........................17
^ Section 5.13. Class Designation...................................17
^ ARTICLE VI.................................................................18
Section 6.1. Redemption of Shares...................................18
Section 6.2. Price. 18
Section 6.3. Payment................................................18^
Section 6.4. Effect of Suspension of Determination of
Net Asset Value......................................18^
Section 6.5. Repurchase by Agreement................................19
Section 6.6. Redemption of Shareholder's Interest...................19^
Section 6.7. Redemption of Shares in Order to Qualify as
Regulated Investment Company; Disclosure of
Holding..............................................19^
Section 6.8. Reductions in Number of Outstanding Shares
Pursuant to Net Asset Value Formula..................20
Section 6.9. Suspension of Right of Redemption......................20
ARTICLE VII..................................................................20^
Section 7.1. Net Asset Value........................................20
Section 7.2. Distributions to Shareholders..........................21
Section 7.3. Determination of Net Income; Constant Net Asset
Value; Reduction of Outstanding Shares...............21
Section 7.4. Allocation Between Principal and Income................22
Section 7.5. Power to Modify Foregoing Procedures...................22
ARTICLE VIII.................................................................22^
Section 8.1. Duration...............................................22
Section 8.2. Termination of Trust...................................23
Section 8.3. Amendment Procedure....................................23
Section 8.4. Merger, Consolidation and Sale of Assets...............24
Section 8.5. Incorporation..........................................24
ARTICLE IX...................................................................25^
ARTICLE X....................................................................25^
Section 10.1. Filing................................................25
Section 10.2. Governing Law.........................................25
Section 10.3. Counterparts..........................................25
Section 10.4. Reliance by Third Parties.............................25
Section 10.5. Provisions in Conflict with Law or Regulations........26
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<PAGE>
AMENDED AND RESTATED DECLARATION OF TRUST
OF
^ SCUDDER U.S. TREASURY MONEY FUND
^ DATED ____________, 1997
AMENDED AND RESTATED DECLARATION OF TRUST made ^__________ ____, 1997,
by the undersigned Trustees;
WHEREAS, pursuant to a Declaration of Trust dated April 4, 1980, as
amended and restated, the Trustees^ established a Massachusetts business trust
for the investment and reinvestment of funds contributed thereto, the beneficial
interest in which is divided into transferable shares;^
WHEREAS, the Trustees desire to amend and restate said Declaration of
Trust in its entirety;
NOW, THEREFORE, the Trustees restate the Declaration of Trust as
follows:
^ ARTICLE I
NAME AND DEFINITIONS
Section 1.1. Name.
The name of the ^ Trust created hereby is the "Scudder U.S. Treasury
Money Fund".
Section 1.2. Definitions.
Wherever they are used herein, the following terms have the following
respective meanings:
(a) ^"By-laws" means the By-laws referred to in Section 2.8 hereof, as
from time to time amended.
(b) ** 1 ^"Class" means the two or more Classes as may be established
and designated from time to time by the Trustees pursuant to Section 5.13
hereof.
(c) The term ^"Commission" has the ^ meaning given it in the 1940 Act.
The term ^"Interested Person" has the meaning given it in the 1940 Act, as
modified by any applicable order or orders of the Commission. Except as
otherwise defined by the Trustees in conjunction with the establishment of any
series of Shares, the term ^"vote of a majority of the Shares outstanding and
entitled to ^ vote" shall have the same meaning as the term ^"vote of a majority
of the outstanding voting securities" given it in the 1940 Act.
(d) ^"Custodian" means any Person other than the Trust who has custody
of any Trust Property as required by Section 17(f) of the 1940 Act, but does not
include a system for the central handling of securities described in said
Section 17(f).
(e) ^"Declaration" means this Amended and Restated Declaration of
Trust as further amended from time to time. Reference in this Declaration of
Trust to ^"Declaration,"
<PAGE>
"hereof," "herein," and "hereunder" shall be deemed to refer to this Declaration
rather than exclusively to the article or section in which such words appear.
(f) ^"Distributor" means the party, other than the Trust, to the
contract described in Section 3.1 hereof.
(g) ^"His" shall include the feminine and neuter, as well as the
masculine^ genders.
(h) ^"Investment Adviser" means the party, other than the Trust, to
the contract described in Section 3.2 hereof.
(i) ^"Municipal Bonds" means obligations issued by or on behalf of
states, territories of the United States and the District of Columbia and their
political subdivisions, agencies and instrumentalities, or other issuers, the
interest from which is exempt from regular Federal income tax.
(j) The ^"1940 Act" means the Investment Company Act of 1940, as
amended from time to time.
(k) ^"Person" means and includes individuals, corporations,
partnerships, trusts, associations, joint ventures and other entities, whether
or not legal entities, and governments and agencies and political subdivisions
thereof.
(l) ^"Series" individually or collectively means the two or more
Series as may be established and designated from time to time by the Trustees
pursuant to Section 5.11 hereof. Unless the context otherwise requires, the term
^"Series" shall include Classes into which shares of the Trust, or of a Series,
may be divided from time to time.
(m) ^"Shareholder" means a record owner of Outstanding Shares.
(n) ^"Shares" means the equal proportionate units of interest into
which the beneficial interest in the Trust shall be divided from time to time,
including the Shares of any and all Series and Classes which may be established
by the Trustees and includes fractions of Shares as well as whole Shares.
^"Outstanding Shares" means those ^ Shares shown as of a time and from time to
time on the books of the Trust or its Transfer Agent as then issued and
outstanding, but shall not include Shares which have been redeemed or
repurchased by the Trust and which are at the time held in the Treasury of the
Trust.
(o) ^"Transfer Agent" means any one or more Persons other than the
Trust who maintains the Shareholder records of the Trust, such as the list of
Shareholders, the number of Shares credited to each account, and the like.
(p) The ^"Trust" means the Scudder ^ U.S. Treasury Money Fund.
(q) ^ The "Trust Property" means any and all property, real or
personal, tangible or intangible, which is owned or held by or for the account
of the Trust or the Trustees.
(r) The ^"Trustees" means the person or persons who has or have signed
this Declaration, so long as he or they shall continue in office in accordance
with the terms hereof, and all other persons who may from time to time be duly
qualified and serving as Trustees in accordance with the provisions of Article
II hereof, and reference herein to a Trustee or the
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<PAGE>
Trustees shall refer to such person or persons in this capacity or their
capacities as trustees hereunder.
* 1 MOVED FROM HERE; TEXT NOT SHOWNARTICLE II
TRUSTEES
Section 2.1. ^ General Powers.
^ The Trustees shall have exclusive and absolute control over the Trust
Property and over the business of the Trust 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 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
both within and 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
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 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.
Section 2.2. Investments.
The Trustees shall have the power:
(a) To operate as and carry on the business of an investment company,
and exercise all the powers necessary and appropriate to the conduct of such
operations.
(b) To invest in, hold for investment, or reinvest in, securities,
including shares of open-end investment companies; common and preferred stocks;
warrants; bonds, debentures, bills, time notes and all other evidences of
indebtedness; negotiable or non-negotiable instruments; government securities,
including securities of any state, municipality or other political subdivision
thereof, or any governmental or quasi-governmental agency or instrumentality;
and money market instruments including bank certificates of deposit, finance
paper, commercial paper, bankers acceptances and all kinds of repurchase
agreements, of any corporation, company, trust, association, firm or other
business organization however established, and of any country, state,
municipality or other political subdivision, or any governmental or
quasi-governmental agency or instrumentality.
(c) To acquire (by purchase, subscription or otherwise), to hold, to
trade in and deal in, to acquire any rights or options to purchase or sell, to
sell or otherwise dispose of, to lend, and to pledge any such securities and to
enter into repurchase agreements and forward foreign currency exchange
contracts, to purchase and sell futures contracts on securities, securities
indices
- 3 -
<PAGE>
and foreign currencies, to purchase or sell options on such contracts, foreign
currency contracts, and foreign currencies and to engage in all types of hedging
and risk management transactions.
(d) To exercise all rights, powers and privileges of ownership or
interest in all securities, repurchase agreements, futures contracts and options
and other assets included in the Trust Property, including the right to vote
thereon and otherwise act with respect thereto and to do all acts for the
preservation, protection, improvement and enhancement in value of all such
assets.
(e) To acquire (by purchase, lease or otherwise) and to hold, use,
maintain, develop and dispose of (by sale or otherwise) any property, real or
personal, including cash, and any interest therein.
(f) To borrow money and in this connection issue notes or other ^
evidence of indebtedness; to secure borrowings by mortgaging, pledging or
otherwise subjecting as security the Trust Property; to endorse, guarantee, or
undertake the performance of any obligation or engagement of any other Person
and to lend Trust Property.
(g) To aid by further investment any corporation, company, trust,
association or firm, any obligation of or interest in which is included in the
Trust Property or in the affairs of which the Trustees have any direct or
indirect interest; to do all acts and things designed to protect, preserve,
improve or enhance the value of such obligation or interest, and to guarantee or
become surety on any or all of the contracts, stocks, bonds, notes, debentures
and other obligations of any such corporation, company, trust, association or
firm.
(h) To 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 the sale of Shares.
(i) To invest, through a transfer of cash, securities and other assets
or otherwise, all or a portion of the Trust Property, or to sell all or a
portion of the Trust Property and invest the proceeds of such sales, in another
investment company that is registered under the 1940 Act.1
(j) In general to carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything necessary, suitable
or proper for the accomplishment of any purpose or the attainment of any object
or the furtherance of any power hereinbefore set forth, either alone or in
association with others, and to do every other act or thing incidental or
appurtenant to or growing out of or connected with the aforesaid business or
purposes, objects or powers.
The foregoing clauses shall be construed both as objects and powers,
and the foregoing enumeration of specific powers shall not be held to limit or
restrict in any manner the general powers of the Trustees.
_______________________
1 Adoption of this Section requires the affirmative vote of two thirds of the
shares of the Trust outstanding and entitled to vote.
- 4 -
<PAGE>
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.
Section 2.3. Legal Title.
Legal title to all the Trust Property, including the property of any
Series of the Trust, shall be vested in the Trustees as joint tenants except
that the Trustees shall have power to cause legal title to any Trust Property to
be held by or in the name of one or more of the Trustees, or in the name of the
Trust, or in the name of any other Person as nominee, on such terms as the
Trustees may determine, provided that the interest of the Trust therein is
deemed appropriately protected. The right, title and interest of the Trustees in
the Trust Property and the property of each Series of the Trust shall vest
automatically in each Person who may hereafter become a Trustee. Upon the
termination of the term of office, resignation, removal or death of a Trustee he
shall automatically cease to have any right, title or interest in any of the
Trust Property or the property of any Series of the Trust, and the right, title
and interest of such Trustee in the Trust Property shall vest automatically in
the remaining Trustees. Such vesting and cessation of title shall be effective
whether or not conveyancing documents have been executed and delivered.
Section 2.4. Issuance and Repurchase of Shares.
The Trustees shall have the power to issue, sell, repurchase, redeem,
retire, cancel, acquire, hold, resell, reissue, dispose of, transfer, and
otherwise deal in Shares and, subject to the provisions set forth in Articles VI
and VII and Section 5.11 hereof, to apply to any such repurchase, redemption,
retirement, cancellation or acquisition of Shares any funds or property of the
particular series of the Trust with respect to which such Shares are issued,
whether capital or surplus or otherwise, to the full extent now or hereafter
permitted by the laws of the Commonwealth of Massachusetts governing business
corporations.
Section 2.5. Delegation; Committees.
The Trustees shall have power 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
the names of the Trustees or otherwise as the Trustees may deem expedient, to
the same extent as such delegation is permitted by the 1940 Act.
Section 2.6. Collection and Payment.
The Trustees shall have power to collect all property due to the Trust;
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.
Section 2.7. Expenses.
The Trustees shall have the 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.
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Section 2.8. 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 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 or repeal such By-laws to
the extent such power is not reserved to the Shareholders.
Notwithstanding the foregoing provisions of this Section 2.8 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.
Section 2.9. Miscellaneous Powers.
Subject to Section 5.11^ hereof, 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; (b) enter into joint ventures,
partnerships and any other combinations or associations; (c) remove Trustees or
fill vacancies in or add to their number, elect and remove such officers and
appoint and terminate such agents or employees as they consider appropriate, and
appoint from their own number, and terminate, any one or more committees which
may exercise some or all of the power and authority of the Trustees as the
Trustees may determine; (d) purchase, and pay for out of Trust Property,
insurance policies insuring the Shareholders, Trustees, officers, employees,
agents, investment advisers, distributors, selected dealers 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 constituting negligence, or whether or not the
Trust would have the power to indemnify such Person against such liability; (e)
establish pension, profit-sharing, share purchase, and other retirement,
incentive and benefit plans for any Trustees, officers, employees and agents of
the Trust; (f) to the extent permitted by law, indemnify any person with whom
the Trust has dealings, including the Investment Adviser, Distributor, Transfer
Agent and selected dealers, 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 and the method by which its accounts shall
be kept; and (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.
Section 2.10. Principal Transactions.
Except in transactions not permitted by the 1940 Act or rules and
regulations adopted by the Commission, the Trustees may, on behalf of the Trust,
buy any securities from or sell any securities to, or lend any assets of the
Trust to, any Trustee or officer of the Trust or any firm of which any such
Trustee or officer is a member acting as principal, or have any such dealings
with the Investment Adviser, Distributor or ^ transfer agent or with any
Interested Person ^ or such Person; and the Trust may employ any such Person, or
firm or company in which such Person is
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an Interested Person, as broker, dealer, legal counsel, registrar, ^ transfer
agent, dividend disbursing agent or ^ Custodian upon customary terms.
Section 2.11. Number of Trustees.
The number of Trustees shall initially be one (1), and thereafter shall
be such number as shall be fixed from time to time by a written instrument
signed by a majority of the Trustees^.
Section 2.12. ^ Election and Term.
Except for the Trustees named herein or appointed to fill vacancies
pursuant to Section 2.14 hereof, the Trustees shall be elected by the
Shareholders owning of record a plurality of the Shares voting at a meeting of
Shareholders. Such a meeting shall be held on a date fixed by the Trustees.
Except in the event of resignation or removals pursuant to Section 2.13 hereof,
each Trustee shall hold office until such time as less than a majority of the
Trustees holding office have been elected by Shareholders, and thereafter until
the holding of a Shareholders' meeting as required by the next following
sentence. In such event the Trustees then in office will call a Shareholders'
meeting for the election of Trustees. Except for the foregoing circumstances,
the Trustees shall continue to hold office and may appoint successor Trustees.
Section 2.13. Resignation and Removal.
Any Trustee may resign his trust (without the need for any prior or
subsequent accounting) by an instrument in writing signed by him and delivered
to the other Trustees and such resignation shall be effective upon such
delivery, or at a later date according to the terms of the instrument. Any of
the Trustees may be removed (provided the aggregate number of Trustees after
such removal shall not be less than one) with cause, by the action of two-thirds
of the remaining Trustees. Any Trustee may be removed at any meeting of
Shareholders by vote of two-thirds of the Outstanding Shares. The Trustees shall
promptly call a meeting of the shareholders for the purpose of voting upon the
question of removal of any such Trustee or Trustees when requested in writing so
to do by the holders of not less than ten percent of the Outstanding Shares^
and, in that connection, the Trustees will assist shareholder communications to
the extent provided for in Section 16(c) under the 1940 Act. 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 or property of any series of the Trust held in the name of the
resigning or removed Trustee. Upon the incapacity or death of any Trustee, his
legal representative shall execute and deliver on his behalf such documents as
the remaining Trustees shall require as provided in the preceding sentence.
Section 2.14. Vacancies.
The term of office of a Trustee shall terminate and a vacancy shall
occur in the event of the death, 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, made by a written
instrument signed by a majority of the Trustees then in office. Any such
appointment shall not become effective, however, until the person named in the
written
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instrument of appointment shall have accepted in writing such appointment and
agreed in writing to be bound by the terms of the Declaration. 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 2.14, 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.
Section 2.15. Delegation of Power to Other Trustees.
Any Trustee may, by power of attorney, delegate his power for a period
not exceeding six (6) months at any one time to any other Trustee or Trustees;
provided that in no case shall less than two (2) Trustees personally exercise
the powers granted to the Trustees under this Declaration except as herein
otherwise expressly provided.
Section 2.16. Shareholder Vote, etc. Not Required.
Except to the extent specifically provided to the contrary in this
Declaration, the Trustees may exercise each of the powers granted to them in
this Declaration without the vote, approval or agreement of the Shareholders,
unless such a vote, approval or agreement is required by the 1940 Act or
applicable laws of the Commonwealth of Massachusetts.
ARTICLE III
CONTRACTS
Section 3.1. Distribution Contract.
The Trustees may in their discretion from time to time enter into an
exclusive or non-exclusive underwriting contract or contracts providing for the
sale of the Shares at a price based on the net asset value of a Share, whereby
the Trustees may either agree to sell the Shares to the other party to the
contract or appoint such other party their sales agent for the Shares, and in
either case on such terms and conditions, if any, as may be prescribed in the
By-laws, and such further terms and conditions as the Trustees may in their
discretion determine not inconsistent with the provisions of this Article III or
of the By-laws; and such contract may also provide for the repurchase of the
Shares by such other party as agent of the Trustees.
Section 3.2. Advisory or Management Contract.
The Trustees may in their discretion from time to time enter into an
investment advisory or management contract or separate advisory contracts with
respect to one or more Series whereby the other party to such contract shall
undertake to furnish to the Trust such management, investment advisory,
statistical and research facilities and services and such other facilities and
services, if any, and all upon such terms and conditions as the Trustees may in
their discretion determine, including the grant of authority to such other party
to determine what securities shall be purchased or sold by the Trust and what
portion of its assets shall be uninvested, which authority shall include the
power to make changes in the investments of the Trust or any Series.
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The Trustees may also employ, or authorize the Investment Adviser to
employ, one or more sub-advisers from time to time to perform such of the acts
and services of the Investment Adviser and upon such terms and conditions as may
be agreed upon between the Investment Adviser and such sub-advisers and approved
by the Trustees. Any reference in this Declaration to the Investment Adviser
shall be deemed to include such sub-advisers unless the context otherwise
requires.
Section 3.3. Affiliations of Trustees or Officers, Etc.
The fact that:
(i) any of the Shareholders, Trustees or officers of the
Trust is a shareholder, director, officer, partner, trustee, employee,
manager, adviser or distributor of or for any partnership, corporation,
trust, association or other organization or of or for any parent or
affiliate of any organization, with which a contract of the character
described in Sections 3.1 or 3.2 above or for services as Custodian,
Transfer Agent, accounting agent or disbursing agent or for related
services may have been or may hereafter be made, or that any such
organization, or any parent or affiliate thereof, is a Shareholder of
or has an interest in the Trust, or that
(ii) any partnership, corporation, trust, association or
other organization with which a contract of the character described in
Sections 3.1 or 3.2 above or for services as Custodian, Transfer Agent,
accounting agent or disbursing agent or for related services may have
been or may hereafter be made also has any one or more of such
contracts with one or more other partnerships, corporations, trusts,
associations or other organizations, or has other business or
interests, shall not affect the validity of any such contract or
disqualify any Shareholder, Trustee or officer of the Trust from voting
upon or executing the same or create any liability or accountability to
the Trust or its Shareholders.
Section 3.4. Compliance with 1940 Act.
Any contract entered into pursuant to Sections 3.1 or 3.2 shall be
consistent with and subject to the requirements of Section 15 of the 1940 Act
(including any amendment thereof or other applicable act of Congress hereafter
enacted), as modified by any applicable order or orders of the Commission, with
respect to its continuance in effect, its termination and the method of
authorization and approval of such contract or renewal thereof.
ARTICLE IV
LIMITATIONS OF LIABILITY OF SHAREHOLDERS,
TRUSTEES AND OTHERS
Section 4.1. No Personal Liability of Shareholders, Trustees, Etc.
No Shareholder shall be subject to any personal liability whatsoever to
any Person in connection with Trust Property or the acts, obligations or affairs
of the Trust. No Trustee, officer, employee or agent of the Trust shall be
subject to any personal liability whatsoever to any Person, other than to the
Trust or its Shareholders, in connection with Trust Property or the affairs of
the Trust, save only that arising from bad faith, willful misfeasance, gross
negligence or reckless disregard of his duties with respect to such Person; and
all such Persons shall look solely to the Trust Property for satisfaction of
claims of any nature arising in connection with the affairs
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of the Trust. If any Shareholder, Trustee, officer, employee, or agent, as such,
of the Trust, is made a ^ part to any suit or proceeding to enforce any such
liability of the Trust, he shall not, on account thereof, be held to any
personal liability. The Trust shall indemnify and hold each Shareholder harmless
from and against all claims and liabilities, to which such Shareholder may
become subject by reason ^ for his being or having been a Shareholder, and shall
reimburse such Shareholder for all legal and other expenses reasonably incurred
by him in connection with any such claim or liability. The indemnification and
reimbursement required by the preceding sentence shall be made only out of the
assets of the one or more Series of which the Shareholder who is entitled to
indemnification or reimbursement was a Shareholder at the time the act or event
occurred which gave rise to the claim against or liability of said Shareholder.
The rights accruing to a Shareholder under this Section 4.1 shall not impair any
other right to which such Shareholder may be lawfully entitled, nor shall
anything herein contained restrict the right of the Trust to indemnify or
reimburse a Shareholder in any appropriate situation even though not
specifically provided herein.
Section 4.2. Non-Liability of Trustees, Etc.
No Trustee, officer, employee or agent of the Trust shall be liable to
the Trust, its Shareholders, or to any Shareholder, 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 the duties involved in the conduct of his
office.
Section 4.3. Mandatory Indemnification.
(a) Subject to the exceptions and limitations contained in paragraph
(b) below:
(i) every person who is, or has been, a Trustee or officer of
the Trust shall be indemnified by the Trust 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, administrative 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 Shareholders by reason of a final adjudication by a court or other
body before which a proceeding was brought that he engaged in 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;
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(iii) in the event of a settlement or other disposition not
involving a final adjudication as provided in paragraph (b)(i) or
(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; or
(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 Disinterested Trustees acting on the matter
(provided that a majority of the Disinterested Trustees then
in office act on the matter) or (y) written opinion of
independent legal counsel.
(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 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 4.3 may be advanced by the Trust 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 4.3, provided that either:
(i) such undertaking is secured by a surety bond or some
other appropriate security provided by the recipient, or the Trust
shall be insured against losses arising out of any such advances; or
(ii) a majority of the Disinterested Trustees acting on the
matter (provided that a majority of the Disinterested 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 4.3, a ^"Disinterested Trustee" is one
who is not (i) 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), or (ii) involved in the claim,
action, suit or proceeding.
Section 4.4. No Bond Required of Trustees.
No Trustee shall be obligated to give any bond or other security for
the performance of any of his duties hereunder.
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Section 4.5. No Duty of Investigation; Notice in Trust Instruments^,
Etc.
No purchaser, lender, transfer agent or other Person dealing with the
Trustees or any officer, employee or agent of the Trust 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, Share, other security of the Trust or
undertaking, and every other act or thing whatsoever executed in connection with
the Trust shall be conclusively presumed to have been executed or done by the
executors thereof only in their capacity as Trustees under this Declaration or
in their capacity as officers, employees or agents of the Trust. Every written
obligation, contract, instrument, certificate, Share, other security of the
Trust or undertaking made or issued by the Trustees may recite that the same is
executed or made by them not individually, but as Trustees under the
Declaration, and that the obligations of the Trust under any such instrument are
not binding upon any of the Trustees or Shareholders individually, but bind only
the trust estate, and may contain any further recital which they or he may deem
appropriate, but the omission of such recital shall not operate to bind the
Trustees individually. The Trustees shall at all times maintain insurance for
the protection of the Trust Property, its Shareholders, 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.
Section 4.6. Reliance on Experts, Etc.
Each Trustee and officer or employee of the Trust shall, in the
performance of his duties, be fully and completely justified and protected with
regard to any act or any failure to act resulting from reliance in good faith
upon the books of account or other records of the Trust, upon an opinion of
counsel, or upon reports made to the Trust by any of its officers or employees
or by the Investment Adviser, the Distributor, Transfer Agent, selected dealers,
accountants, appraisers 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 V
SHARES OF BENEFICIAL INTEREST
Section 5.1. Beneficial Interest.
The interest of the beneficiaries hereunder shall be divided into
transferable Shares of beneficial interest, all of one class, except as provided
in Section 5.11 and Section 5.13 hereof, par value $.01 per share. The number of
Shares of beneficial interest authorized hereunder is unlimited. All Shares
issued hereunder including, without limitation, Shares issued in connection with
a dividend in Shares or a split of Shares, shall be fully paid and
non-assessable.
Section 5.2. Rights of Shareholders.
The ownership of the Trust Property and the property of each Series of
the Trust of every description and the right to conduct any business
herein-before described are vested exclusively in the Trustees, and the
Shareholders shall have no interest therein other than the beneficial interest
conferred by their Shares, and they shall have no right to call for any
partition or division of any property, profits, rights or interests of the Trust
nor can they be called upon to share or assume
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any losses of the Trust or suffer an assessment of any kind by virtue of their
ownership of Shares. The Shares shall be personal property giving only the
rights specifically set forth in this Declaration. The Shares shall not entitle
the holder to preference, preemptive, appraisal, conversion or exchange rights,
except as the Trustees may determine with respect to any Series of Shares.
Section 5.3. Trust Only.
It is the intention of the Trustees to create only the relationship of
Trustee and beneficiary between the Trustees and each Shareholder from time to
time. It is not the intention of the Trustees to create a general partnership,
limited partnership, joint stock association, corporation, bailment or any form
of legal relationship other than a trust. Nothing in this Declaration ^ shall be
construed to make the Shareholders, either by themselves or with the Trustees,
partners or members of a joint stock association.
Section 5.4. Issuance of Shares.
The Trustees in their discretion may, from time to time without vote of
the Shareholders, issue Shares, in addition to the then issued and outstanding
Shares and Shares held in the treasury, 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 Shares, the Trustees may issue fractional Shares and Shares
held in the treasury. The Trustees may from time to time divide or combine the
Shares into a greater or lesser number without thereby changing the
proportionate beneficial interests in the Trust. Contributions to the Trust may
be accepted for, and Shares shall be redeemed as, whole Shares and/or 1/1,000ths
of a Share or integral multiples thereof.
Section 5.5. Register of Shares.
A register shall be kept at the principal office of the Trust or an
office of the Transfer Agent which shall contain the names and addresses of the
Shareholders and the number of Shares held by them respectively and a record of
all transfers thereof. Such register shall be conclusive as to who are the
holders of the Shares and who shall be entitled to receive dividends or
distributions or otherwise to exercise or enjoy the rights of Shareholders. No
Shareholder shall be entitled to receive payment of any dividend or
distribution, nor to have notice given to him as herein or in the By-laws
provided, until he has given his address to the Transfer Agent or such other
officer or agent of the Trustees as shall keep the said register for entry
thereon. ^ It is not contemplated that certificates will be issued for the
Shares; however, the Trustees, in their discretion, may authorize the issuance
of share certificates and promulgate appropriate rules and regulations as to
their use.
Section 5.6. Transfer of Shares.
Except as otherwise provided by the Trustees, shares shall be
transferable on the records of the Trust only by the record holder thereof or by
his agent thereunto duly authorized ^, upon delivery to the Trustees or the
Transfer Agent of a duly executed instrument of transfer, together with such
evidence of the genuineness of each such execution and authorization and of
other matters as may reasonably be required. Upon such delivery the transfer
shall be recorded on the register of the Trust. Until such record is made, the
Shareholder of record shall be deemed to be
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the holder of such Shares for all purposes hereunder and neither the Trustees
nor any transfer agent or registrar nor any officer, employee or agent of the
Trust shall be affected by any notice of the proposed transfer.
Any person becoming entitled to any Shares in consequence of the death,
bankruptcy, or incompetence of any Shareholder, or otherwise by operation of
law, shall be recorded on the register of Shares as the holder of such Shares
upon production of the proper evidence thereof to the Trustees or the Transfer
Agent, but until such record is made, the Shareholder of record shall be deemed
to be the holder of such Shares for all purposes hereunder and neither the
Trustees nor any Transfer Agent or registrar nor any officer or agent of the
Trust shall be affected by any notice of such death, bankruptcy or incompetence,
or other operation of law.
Section 5.7. Notices, Reports.
Any and all notices to which any Shareholder may be entitled and any
and all communications shall be deemed duly served or given if mailed, postage
prepaid, addressed to any Shareholder of record at his last known address as
recorded on the register of the Trust. A notice of a meeting, an annual report
and any other communication to Shareholders need not be sent to a Shareholder
(i) if an annual report and a proxy statement for two consecutive shareholder
meetings have been mailed to such Shareholder's address and have been returned
as undeliverable, (ii) if all, and at least two, checks (if sent by first class
mail) in payment of dividends on Shares during a twelve-month period have been
mailed to such Shareholder's address and have been returned as undeliverable or
(iii) in any other case in which a proxy statement concerning a meeting of
security holders is not required to be given pursuant to the Commission's proxy
^ rules as from time to time in effect under the Securities Exchange Act of
1934. However, delivery of such proxy statements, annual reports and other
communications shall resume if and when such Shareholder delivers or causes to
be delivered to the Trust written notice setting forth such Shareholder's then
current address.
Section 5.8. Treasury Shares.
Shares held in the treasury shall, until reissued pursuant to Section
5.4, not confer any voting rights on the Trustees, nor shall such Shares be
entitled to any dividends or other distributions declared with respect to the
Shares.
Section 5.9. Voting Powers.
The Shareholders shall have power to vote only (i) for the election of
Trustees as provided in Section 2.12; (ii) for the removal of Trustees as
provided in Section 2.13; (iii) with respect to any ^ amendment of this
Declaration to the extent and as provided in Section 8.3; ^(iv) to the same
extent as the stockholders of Massachusetts business corporation as to whether
or not a court action, proceeding or claim should or should not be brought or
maintained derivatively or as a class action on behalf of the Trust or ^ any
Series or Class thereof or the Shareholders (provided, however, that a
Shareholder of a particular Series or Class shall not be entitled to bring a
derivative or class action on behalf of any other Series or Class (or
Shareholder of any other Series or Class) of the Trust); and (v)2 with respect
to such additional matters relating to the Trust as may be required by this
Declaration, the By-laws or any registration of the
_______________________
2 Adoption of this amended and restated Section requires the affirmative vote
of two thirds of the shares of the Trust outstanding and entitled to vote.
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Trust as an investment company under the 1940 Act with the Commission (or any
successor agency) or as the Trustees may consider necessary or desirable. Each
whole Share shall be entitled to one vote as to any matter on which it is
entitled to vote and each fractional Share shall be entitled to a proportionate
fractional vote, except that the Trustees may, in conjunction with the
establishment of any Series or Class of Shares, establish or reserve the right
to establish conditions under which the several Series or Classes shall have
separate voting rights or^ no voting rights. There shall be no cumulative voting
in the election of Trustees. Until Shares are issued, the Trustees may exercise
all rights of Shareholders and may take any action required by law, this
Declaration or the By-laws to be taken by Shareholders. The By-laws may include
further provisions for ^ Shareholders' votes and meetings and related matters.
Section 5.10. Meetings of Shareholders.
Meetings of Shareholders may be called at any time by the President,
and shall be called by the President and Secretary at the request in writing or
by resolution, of a majority of Trustees, or at the written request of the
holder or holders of ten percent (10%) or more of the total number of Shares
then issued and outstanding of the Trust entitled to vote at such meeting. Any
such request shall state the purpose of the proposed meeting.
Section 5.11. Series Designation.
The Trustees, in their discretion, may authorize the division of Shares
into two or more Series, and the different Series 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; provided,
that all Shares shall be identical except that there may be variations so fixed
and determined between different Series as to investment objective, purchase
price, allocation of expenses, right of redemption, special and relative rights
as to dividends and on liquidation, conversion rights, and conditions under
which the several Series shall have separate voting rights. All references to
Shares in this Declaration shall be deemed to be Shares of any or all ^ Series
as the context may require.
(a) ^ All provisions herein relating to the Trust shall apply equally
to each Series of the Trust except as the context requires otherwise.
(b) The number of authorized Shares and the number of Shares of each
Series that may be issued shall be unlimited. The Trustees may classify or
reclassify any unissued Shares or any Shares previously issued and reacquired of
any Series into one or more Series that may be established and designated from
time to time. The Trustees may hold as treasury Shares (of the same or some
other Series), reissue for such consideration and on such terms as they may
determine, or cancel any Shares of any Series reacquired by the Trust at their
discretion from time to time.
(c) All consideration received by the Trust for the issue or sale of
Shares of a particular Series, together with all assets in which such
consideration is invested or reinvested, all income, earnings, profits, and
proceeds thereof, including any proceeds derived from the sale, exchange or
liquidation of such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, shall
irrevocably belong to that Series for all purposes, subject only to the rights
of creditors of such Series and except as may otherwise be required by
applicable 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, the Trustees shall
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allocate them among any one or more of the Series 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 ^ Shareholders of all Series for all
purposes.
(d) The assets belonging to each particular Series shall be charged
with the liabilities of the Trust in respect of that Series and with all
expenses, costs, charges and reserves attributable to that Series, and any
general liabilities, expenses, costs, charges or reserves of the Trust which are
not readily identifiable as belonging to any particular Series shall be
allocated and charged by the Trustees to and among any one or more of the Series
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 Shareholders of all Series 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 Shareholders. The assets of
a particular Series of the Trust shall, under no circumstances, be charged with
liabilities attributable to any other Series of the Trust. All persons extending
credit to, or contracting with or having any claim against a particular Series
of the Trust shall look only to the assets of that particular Series for payment
of such credit, contract or claim. No Shareholder or former Shareholder of any
Series shall have any claim on or right to any assets allocated or belonging to
any other ^ Series.
(e) Each Share of a Series of the Trust shall represent a beneficial
interest in the net assets of such Series. Each holder of Shares of a Series
shall be entitled to receive his pro rata share of distributions of income and
capital gains made with respect to such Series, except as provided in Section
5.13 hereof. Upon redemption of his Shares or indemnification for liabilities
incurred by reason of his being or having been a Shareholder of a Series, such ^
Shareholder shall be paid solely out of the funds and property of such Series of
the Trust. Upon liquidation or termination of a Series of the Trust,
Shareholders of such Series shall be entitled to receive a pro rata share of the
net assets of such Series, except as provided in Section 5.13 hereof. A
Shareholder 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
Shareholders of any other Series of the Trust.
(f) The establishment and designation of any Series of Shares 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 as otherwise provided in such instrument. The
Trustees may by an instrument executed by a majority of their number abolish any
Series and the establishment and designation thereof. Except as otherwise
provided in this Article V, the Trustees shall have the power to determine the
designations, preferences, privileges, limitations and rights, of each class and
Series of Shares. Each instrument referred to in this paragraph shall have the
status of an amendment to this Declaration.
Section 5.12. Assent to Declaration of Trust.
Every Shareholder, by virtue of having become a shareholder, shall be
held to have expressly assented and agreed to the terms hereof and to have
become a party hereto.
Section 5.13. Class Designation.
The Trustees, in their discretion, may authorize the division of the
Shares of the Trust, or, if any Series be established, the Shares of any Series,
into two or more Classes, and the different
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Classes shall be established and designated, and the variations in the relative
rights and preferences as between the different Classes shall be fixed and
determined, by the Trustees; provided, that all Shares of the Trust or of any
Series shall be identical to all other Shares of the Trust or the same Series,
as the case may be, except that there may be variations between different ^
Classes as to allocation of expenses, right of redemption, special and relative
rights as to dividends and on liquidation, conversion rights, and conditions
under which the several Classes shall have separate voting rights. All
references to Shares in this Declaration shall be deemed to be Shares of any or
all Classes as the context may require.
If the Trustees shall divide the Shares of the Trust or any Series into two or
more Classes, the following provisions shall be applicable:
(a) All provisions herein ^ relating to the Trust, or any Series of
the Trust, shall apply equally to each Class of Shares of the Trust or of any
Series of the Trust, except as the context requires otherwise.
(b) The number of Shares of each Class that may be issued shall be
unlimited. The Trustees may classify or reclassify any ^ Shares or any Series of
any Shares into one or more Classes that may be established and designated from
time to time. The Trustees may hold as treasury Shares (of the same or some
other Class), reissue for such consideration and on such terms as they may
determine, or cancel any Shares of any Class reacquired by the Trust at their
discretion from time to time.
(c) Liabilities, expenses, costs, charges and reserves related to the
distribution of, and other identified expenses that should properly be allocated
to, the Shares of a particular Class may be charged to and borne solely by such
Class and the bearing of expenses solely by a Class of Shares may be
appropriately reflected (in a manner determined by the Trustees) and cause
differences in the net asset value attributable to, and the dividend, redemption
and liquidation rights of, the Shares of different ^ classes. Each allocation of
liabilities, expenses, costs, charges and reserves by the Trustees shall be
conclusive and binding upon the Shareholders of all Classes for all purposes.
(d) The establishment and designation of any Class of Shares 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 Class, or as otherwise provided in such
instrument. The Trustees may, by an instrument executed by a majority of their
number, abolish any Class and the establishment and designation thereof. Each
instrument referred to in this paragraph shall have the status of an amendment
to this Declaration.
ARTICLE VI
REDEMPTION AND REPURCHASE OF SHARES
Section 6.1. Redemption of Shares.
All Shares of the Trust shall be redeemable, at the redemption price
determined in the manner set out in this Declaration. Redeemed or repurchased ^
Shares may be resold by the Trust.
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The Trust shall redeem the Shares upon the appropriately verified
written application of the record holder thereof (or upon such other form of
request as the Trustees may determine) at such office or agency as may be
designated from time to time for that purpose in the Trust's then effective
registration statement under the Securities Act of 1933. The Trustees may from
time to time specify additional conditions, not inconsistent with the 1940 Act,
regarding the redemption of Shares in the Trust's then effective registration
statement under the Securities Act of 1933.
Section 6.2. Price.
Shares shall be redeemed at their net asset value, which may be reduced
by any redemption fee authorized by the Trustees, determined as set forth in
Section 7.1 hereof as of such time as the Trustees shall have theretofore
prescribed by resolution. In the absence of such resolution, the redemption
price of Shares deposited shall be the net asset value of such Shares next
determined as set forth in Section 7.1 hereof after receipt of such application.
Section 6.3. Payment.
Payment for such Shares shall be made in cash or in property out of the
assets of the relevant ^ Series of the Trust to the Shareholder of record at
such time and in the manner, not inconsistent with the 1940 Act or other
applicable laws, as may be specified from time to time in the Trust's then
effective registration statement under the Securities Act of 1933, subject to
the provisions of Section 6.4 hereof.
Section 6.4. Effect of Suspension of Determination of
Net Asset Value.
If, pursuant to Section 6.9 hereof, the Trustees shall declare a
suspension of the determination of net asset value, the rights of Shareholders
(including those who shall have applied for redemption pursuant to Section 6.1
hereof but who shall not yet have received payment) to have Shares redeemed and
paid for by the Trust shall be suspended until the termination of such
suspension is declared. Any record holder who shall have his redemption right so
suspended may, during the period of such suspension, by appropriate written
notice of revocation at the office or agency where application was made, revoke
any application for redemption not honored and withdraw any certificates on
deposit. The redemption price of Shares for which redemption applications have
not been revoked shall be the net asset value of such Shares next determined as
set forth in Section 7.1 after the termination of such suspension, and payment
shall be made within seven (7) days after the date upon which the application
was made plus the period after such application during which the determination
of net asset value was suspended.
Section 6.5. Repurchase by Agreement.
The Trust may repurchase Shares directly, or through the Distributor or
another agent designated for the purpose, by agreement with the owner thereof at
a price not exceeding the net asset value per ^ Share determined as of the time
when the purchase or contract ^ of purchase is made or the net asset value as of
any time which may be later determined pursuant to Section 7.1 hereof, provided
payment is not made for the ^ Shares prior to the time as of which such net
asset value is determined.
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Section 6.6. Redemption of Shareholder's Interest.
The Trust shall have the right at any time without prior notice to the
^ Shareholder to redeem Shares of any ^ Shareholder for their then current net
asset value per Share if
(a) at such time the ^ Shareholder owns Shares having an aggregate net
asset value of less than an amount set from time to time by the Trustees subject
to such terms and conditions as the Trustees may approve, and subject to the
Trust's giving general notice to all ^ Shareholders of its intention to avail
itself of such right, either by publication in the Trust's registration
statement, if any, or by such other means as the Trustees may determine, or^
(b) ^ The Trustees believe that it is in the best interest of the
Trust to do so because of prior involvement by the Shareholder in fraudulent
acts relating to securities transactions.
Section 6.7. Redemption of Shares in Order to Qualify as Regulated
Investment Company; Disclosure of Holding.
If the Trustees shall, at any time and in good faith, be of the opinion
that direct or indirect ownership of Shares or other securities of the Trust has
or may become concentrated in any Person to an extent which would disqualify any
Series of the Trust as a regulated investment company under the Internal Revenue
Code, then the Trustees shall have the power by lot or other means deemed
equitable by them (i) to call for redemption by any such Person a number, or
principal amount, of Shares or other securities of the Trust sufficient to
maintain or bring the direct or indirect ownership of Shares or other securities
of the Trust into conformity with the requirements for such qualification and
(ii) to refuse to transfer or issue Shares or other securities of the Trust to
any Person whose acquisition of the Shares or other securities of the Trust in
question would result in such disqualification. The redemption shall be effected
at the redemption price and in the manner provided in Section 6.1.
The holders of Shares or other securities of the Trust shall upon
demand disclose to the Trustees in writing such information with respect to
direct and indirect ownership of Shares or other securities of the Trust as the
Trustees deem necessary to comply with the provisions of the Internal Revenue
Code, or to comply with the requirements of any other taxing authority.
Section 6.8. Reductions in Number of Outstanding Shares Pursuant to
Net Asset Value Formula.
The Trust may also reduce the number of Outstanding Shares pursuant to
the provisions of Section 7.3.
Section 6.9. Suspension of Right of Redemption.
The Trust may declare a suspension of the right of redemption or
postpone the date of payment or redemption for the whole or any part of any
period (i) during which the New York Stock Exchange is closed other than
customary week-end and holiday closings, (ii) during which trading on the New
York Stock Exchange is restricted, (iii) during which an emergency exists as a
result of which disposal by the Trust of securities owned by it is not
reasonably practicable or it is not reasonably practicable for the Trust fairly
to determine the value of its net assets, or (iv) during any other period when
the Commission may for the protection of Shareholders of the Trust by order
permit suspension of the right of redemption or postponement of the date of
payment or
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redemption; provided that applicable rules and regulations of the Commission
shall govern as to whether the conditions prescribed in (ii), (iii), or (iv)
exist. Such suspension shall take effect at such time as the Trust shall specify
but not later than the close of business on the business day next following the
declaration of suspension, and thereafter there shall be no right of redemption
or payment on redemption until the Trust shall declare the suspension at an end,
except that the suspension shall terminate in any event on the first day on
which said stock exchange shall have reopened or the period specified in (ii) or
(iii) shall have expired (as to which in the absence of an official ruling by
the Commission, the determination of the Trust shall be conclusive). In the case
of a suspension of the right of redemption, a Shareholder may either withdraw
his request for redemption or receive payment based on the net asset value
existing after the termination of the suspension.
ARTICLE VII
DETERMINATION OF NET ASSET VALUE,
NET INCOME AND DISTRIBUTIONS
Section 7.1. Net Asset Value.
The value of the assets of the Trust or any Series of the Trust shall
be determined by appraisal of the securities of the Trust or allocated to such
Series, such appraisal to be on the basis of ^ such method as shall be deemed to
reflect the fair value thereof, determined ^ in good faith by or under the
direction of the Trustees. From the total value of said assets, there shall be
deducted all indebtedness, interest, taxes, payable or accrued, including
estimated taxes on unrealized book profits, expenses and management charges
accrued to the appraisal date, net income determined and declared as a
distribution and all other items in the nature of liabilities attributable to
the Trust or such Series or Class thereof which shall be deemed appropriate. The
net asset value of a Share shall be determined by dividing the net asset value
of the Class, or, if no Class has been established, of the Series, or, if no
Series has been established, of the Trust, by the number of Shares of that
Class, or Series, or of the Trust, as applicable, outstanding. The net asset
value of Shares of the Trust or any Class or Series of the Trust shall be
determined pursuant to the procedure and methods prescribed or approved by the
Trustees in their discretion and as set forth in the most recent Registration
Statement of the Trust as filed with the Securities and Exchange Commission
pursuant to the requirements of the Securities Act of 1933, as amended, the ^
1940 Act, as amended, and the Rules thereunder. The net asset value of the
Shares shall be determined at least once on each business day, as of the close
of trading on the New York Stock Exchange or as of such other time or times as
the Trustees shall determine. The power and duty to make the daily calculations
may be delegated by the Trustees to the Investment Adviser, the Custodian, the
Transfer Agent or such other Person as the Trustees may determine by resolution
or by approving a contract which delegates such duty to another Person. The
Trustees may suspend the daily determination of net asset value to the extent
permitted by the 1940 Act.^
Section 7.2. Distributions to Shareholders.
The Trustees shall from time to time distribute ratably among the
Shareholders of the Trust or a Series such proportion of the net profits,
surplus (including paid-in surplus), capital, or assets of the Trust or such
Series held by the Trustees as they may deem proper. Such distributions may be
made in cash or property (including without limitation any type of obligations
of the Trust or such Series or any assets thereof), and the Trustees may
distribute ratably among the Shareholders additional Shares of the Trust or such
Series issuable hereunder in such manner, at such times, and on such terms as
the Trustees may deem proper. Such distributions may be
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among the Shareholders of record at the time of declaring a distribution or
among the Shareholders of record at such other date or time or dates or times as
the Trustees shall determine. The Trustees may in their discretion determine
that, solely for the purposes of such distributions, Outstanding Shares shall
exclude Shares for which orders have been placed subsequent to a specified time
on the date the distribution is declared or on the next preceding day if the
distribution is declared as ^ of a day on which Boston banks are not open for
business, all as described in the registration statement under the Securities
Act of 1933. 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 the Series
or to meet obligations of the Trust or the Series, 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. The Trustees may adopt and offer to Shareholders
such dividend reinvestment plans, cash dividend payout plans or related plans as
the Trustees shall deem appropriate. The above provisions may be modified to the
extent required by a plan adopted by the Trustees to establish Classes of Shares
of the Trust or of a Series.
Inasmuch as the computation of net income and gains for Federal income
tax purposes may vary from the computation thereof on the books, the above
provisions shall be interpreted to give the Trustees the power in their
discretion to distribute for any fiscal year as ordinary dividends and as
capital gains distributions, respectively, additional amounts sufficient to
enable the Trust or the Series to avoid or reduce liability for taxes.
Section 7.3. Determination of Net Income; Constant Net Asset Value;
Reduction of Outstanding Shares.
Subject to Section 5.11 and Section 5.13 hereof, the net income of the
Trust or any Series shall be determined in such manner as the Trustees shall
provide by resolution. Expenses of the Trust or a Series, including the advisory
or management fee, shall be accrued each day. Such net income may be determined
by or under the direction of the Trustees as of the close of trading on the New
York Stock Exchange on each day on which such Exchange is open or as of such
other time or times as the Trustees shall determine, and, except as provided
herein, all the net income of the Trust or any Series, as so determined, may be
declared as a dividend on the Outstanding Shares of the Trust or such Series.
If, for any reason, the net income of the Trust or any Series, determined at any
time is a negative amount, the Trustees shall have the power with respect to the
Trust or such Series (i) to offset each Shareholder's pro rata share of such
negative amount from the accrued dividend account of such Shareholder, or (ii)
to reduce the number of Outstanding Shares of the Trust or such Series by
reducing the number of Shares in the account of such Shareholder by that number
of full and fractional Shares which represents the amount of such excess
negative net income, or (iii) to cause to be recorded on the books of the Trust
or such Series an asset account in the amount of such negative net income, which
account may be reduced by the amount, provided that the same shall thereupon
become the property of the Trust or such Series with respect to the Trust or
such Series and shall not be paid to any Shareholder, of dividends declared
thereafter upon the Outstanding Shares of the Trust or such Series on the day
such negative net income is experienced, until such asset account is reduced to
zero; or (iv) to combine the methods described in clauses (i) and (ii) and (iii)
of this sentence, in order to cause the net asset value per Share of the Trust
or such Series to remain at a constant amount per Outstanding Share immediately
after each such determination and declaration. The Trustees shall also have the
power to fail to declare a dividend out of net income for the purpose of causing
the net asset^ value per Share to be increased to a constant amount. The
Trustees shall not be required to adopt, but may at any time adopt, discontinue
or amend the practice of maintaining the net asset value per Share of the Trust
or a Series at a constant amount.
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Section 7.4. Allocation Between Principal and Income.
The Trustees shall have full discretion to determine whether any cash
or property received shall be treated as income or as principal and whether any
item of expense shall be charged to the income or the principal ^ amount, and
their determination made in good faith shall be conclusive upon the
Shareholders. In the case of stock dividends received, the Trustees shall have
full discretion to determine, in the light of the particular circumstances, how
much if any of the value thereof shall be treated as income, the balance, if
any, to be treated as principal.
Section 7.5. Power to Modify Foregoing Procedures.
Notwithstanding any of the foregoing provisions of this Article VII,
the Trustees may prescribe, in their absolute discretion, such other bases and
times for determining the per Share net asset value or net income, or the
declaration and payment of dividends and distributions as they may deem
necessary or desirable.
ARTICLE VIII
DURATION; TERMINATION OF TRUST;
AMENDMENT; MERGERS, ETC.
Section 8.1. Duration.
The Trust shall continue without limitation of time but subject to the
provisions of this Article VIII.
Section 8.2. Termination of Trust.
(a) The Trust or any Series of the Trust may be terminated by an
instrument in writing signed by ^ a majority of the Trustees, or by the
affirmative vote of the holders of a majority of the Shares of the Trust or
Series outstanding and entitled to vote^ at any meeting of Shareholders. Upon
the termination of the Trust or any Series,
(i) ^ the Trust or any Series 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 or Series and all of the powers of the Trustees under this
Declaration shall continue until the affairs of the Trust or Series
shall have been wound up, including the power to fulfill or discharge
the contracts of the Trust or Series, collect its assets, sell, convey,
assign, exchange, transfer or otherwise dispose of all or any part of
the remaining Trust Property or property of the Series 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; and
(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 property of the
Series, in cash or in kind or partly each, among the Shareholders of
the Trust or Series according to their respective rights.
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(b) After termination of the Trust or any Series and distribution to
the Shareholders 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, and the Trustees shall thereupon be discharged
from all further liabilities and duties hereunder, and the rights and interests
of all Shareholders of the Trust or Series shall thereupon cease.
Section 8.3. Amendment Procedure.
(a) This Declaration may be amended by a vote of the holders of a
majority of the Shares outstanding and entitled to vote. Amendments shall be
effective upon the taking of action as provided in this section or at such later
time as shall be specified in the applicable vote or instrument. The Trustees
may also amend this Declaration without the vote or consent of Shareholders if
they deem it necessary to conform this Declaration to the requirements of
applicable federal or state laws or regulations or the requirements of the
regulated investment company ^ provisions of the Internal Revenue Code
(including those provisions of such Code relating to the retention of the
exemption from federal income tax with respect to dividends paid by the Trust
out of interest income received on Municipal Bonds), 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 Shareholders if they deem it necessary or
desirable 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 make any other changes in the Declaration which do not materially
adversely affect the rights of Shareholders hereunder.
(b) No amendment may be made under this Section 8.3 which would change
any rights with respect to any Shares of the Trust or Series by reducing the
amount payable thereon upon liquidation of the Trust or Series or by diminishing
or eliminating any voting rights pertaining thereto, except with the vote or
consent of the holders of two-thirds of the Shares of the Trust or Series
outstanding and entitled to vote. Nothing contained in this Declaration shall
permit the amendment of this Declaration to impair the exemption from personal
liability of the Shareholders, Trustees, officers, employees and agents of the
Trust or to permit assessments upon Shareholders.
(c) A certificate signed by a majority of the Trustees setting forth
an amendment and reciting that it was duly adopted by the Shareholders or by the
Trustees as aforesaid or a copy of the Declaration, as amended, and executed by
a majority of the Trustees, shall be conclusive evidence of such amendment when
lodged among the records of the Trust.
Notwithstanding any other provision hereof, until such time as a
Registration Statement under the Securities Act of 1933, as amended, covering
the first public offering of securities of the Trust shall have become
effective, 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.
Section 8.4. 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 the property of any
Series, including its good will, upon such terms and
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conditions and for such consideration when and as authorized ^ by an instrument
in writing signed by a majority of the Trustees.3
Section 8.5. ^ Incorporation.
When authorized by an instrument in writing signed by a majority of the
Trustees,4 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 the property of any Series or to carry on any business in
which the Trust or the Series shall directly or indirectly have any interest,
and to sell, convey and transfer the Trust Property or the property of any
Series to any such corporation, trust, association or organization in exchange
for the Shares or securities thereof or otherwise, and to lend money to,
subscribe for the Shares or securities 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 the Series holds or is about to acquire shares or any other interest. The
Trustees may also cause a merger or consolidation between the Trust or any
Series or any successor 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 Shareholders 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 to such organization or entities.
ARTICLE IX
REPORTS TO SHAREHOLDERS
Section 9. The Trustees shall at least semi-annually submit to
the Shareholders a written financial report, which may be included in the
Trust's prospectus or statement of additional information, of the transactions
of the Trust, including financial statements which shall at least annually be
certified by independent public accountants.
ARTICLE X
MISCELLANEOUS
Section 10.1. Filing.
This Declaration and any amendment hereto shall be filed in the office
of the Secretary of the Commonwealth of Massachusetts and in such other places
as may be required under the laws of the Commonwealth of Massachusetts and may
also be filed or recorded in such other places as the Trustees deem appropriate.
Unless the amendment is embodied in an instrument signed by a majority of the
Trustees, each amendment filed shall be accompanied by a certificate signed and
acknowledged by a Trustee stating that such action was duly taken in a manner
provided herein.
_______________________
3 Adoption of this amended and restated Section requires the affirmative vote
of two thirds of the shares of the Trust outstanding and entitled to vote.
4 Adoption of this amended and restated Section requires the affirmative vote
of two thirds of the shares of the Trust outstanding and entitled to vote.
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A restated Declaration, integrating into a single instrument all of the
provisions of the Declaration which are then in effect and operative, may be
executed from time to time by a majority of the Trustees and shall, upon filing
with the Secretary of the Commonwealth of Massachusetts, be conclusive evidence
of all amendments contained therein and may hereafter be referred to in lieu of
the original Declaration and the various amendments thereto. The restated
Declaration may include any amendment which the Trustees are empowered to adopt,
whether or not such amendment has been adopted prior to the execution of the
restated Declaration.
Section 10.2. Governing Law.
This Declaration is executed by the Trustees and delivered in the
Commonwealth of Massachusetts and with reference to the internal 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 internal
laws of said State without regard to the choice of law rules thereof.
Section 10.3. 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.
Section 10.4. Reliance by Third Parties.
Any certificate executed by an individual who, according to the records
of the Trust appears to be a Trustee hereunder, certifying to: (a) the number or
identity of Trustees or Shareholders, (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 Shareholders, (d) the fact that the number of Trustees or
Shareholders 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.
Section 10.5. Provisions in Conflict with Law or Regulations.
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, the regulated investment company provisions of the
Internal Revenue Code or with other applicable laws and regulations, the
conflicting provision shall be deemed never to have constituted a part of this
Declaration; 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.
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 provisions in any other jurisdiction or any other provision of this
Declaration in any jurisdiction.
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IN WITNESS WHEREOF, the undersigned has executed this instrument this
^_______ day of _______________, 1997.
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as Trustee and not Individually
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as Trustee and not Individually
------------------------------------
as Trustee and not Individually
------------------------------------
as Trustee and not Individually
------------------------------------
as Trustee and not Individually
^ THE COMMONWEALTH OF MASSACHUSETTS
County of Suffolk _____________ ____, 1997 ^
Then personally appeared the above-named ^___________________ who
acknowledged the foregoing instrument to be ^ his/her free act and deed.
Before me,
^------------------------------
Notary Public
My commission expires: ^__________
- 26 -
<PAGE>
Exhibit D
---------
SCUDDER CASH INVESTMENT TRUST
SCUDDER GNMA FUND
SCUDDER INVESTMENT TRUST
Scudder Classic Growth Fund
Scudder Large Company Growth Fund
Scudder Growth and Income Fund
SCUDDER PORTFOLIO TRUST
Scudder Income Fund
Scudder High Yield Bond Fund
Scudder Balanced Fund
SCUDDER U.S. TREASURY MONEY FUND
Each of Scudder Cash Investment Trust, Scudder GNMA Fund and Scudder U.S.
Treasury Money Fund has elected to be classified as a diversified open-end
investment company. Each of Scudder Classic Growth Fund, Scudder Large Company
Growth Fund, Scudder Growth and Income Fund, Scudder Income Fund, Scudder High
Yield Bond Fund and Scudder Balanced Fund has elected to be classified as a
diversified series of an open-end investment company.
In addition, each Fund will not:
(a) borrow money, except as permitted under the Investment Company Act of
1940, as amended, and as interpreted or modified by regulatory
authority having jurisdiction, from time to time;
(b) issue senior securities, except as permitted under the Investment
Company Act of 1940, as amended, and as interpreted or modified by
regulatory authority having jurisdiction, from time to time;
(c) engage in the business of underwriting securities issued by others,
except to the extent that the Fund may be deemed to be an underwriter
in connection with the disposition of portfolio securities;
(d) concentrate its investments in a particular industry, as that term is
used in the Investment Company Act of 1940, as amended, and as
interpreted or modified by regulatory authority having jurisdiction,
from time to time (except that Scudder Cash Investment Trust reserves
the freedom of action to concentrate its investments in instruments
issued by domestic banks);
(e) purchase or sell real estate, which term does not include securities
of companies which deal in real estate or mortgages or investments
secured by real estate or interests therein, except that the Fund
reserves freedom of action to hold and to sell real estate acquired as
a result of the Fund's ownership of securities;
(f) purchase physical commodities or contracts relating to physical
commodities; or
<PAGE>
(g) make loans to other persons, except (i) loans of portfolio securities,
and (ii) to the extent that entry into repurchase agreements and the
purchase of debt instruments or interests in indebtedness in
accordance with the Fund's investment objective and policies may be
deemed to be loans.
<PAGE>
PROXY PROXY
SCUDDER BALANCED FUND
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
Special Meeting of Shareholders - October 24, 1997
The undersigned hereby appoints [ ], [ ] and [ ] and each of them, the
proxies of the undersigned, with the power of substitution to each of them, to
vote all shares of the Fund which the undersigned is entitled to vote at the
Special Meeting of Shareholders of the Fund to be held at the offices of
Scudder, Stevens & Clark, Inc., Two International Place, Boston Massachusetts
02110, on October 24, 1997 at 9:30 a.m., eastern time, and at any adjournments
thereof.
Unless otherwise specified in the squares provided, the undersigned's vote
will be cast FOR each numbered item listed below.
The Board members of your Fund, including those who are not affiliated with
the Fund or Scudder, recommend that you vote FOR each item.
1. To approve the new Investment Management
Agreement between the Fund and Scudder
Kemper Investments, Inc.; FOR [ ] AGAINST [ ] ABSTAIN [ ]
2. The election of Trustees;
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the contrary to vote for all nominees
below) [ ] listed below [ ]
Nominees: Henry P. Becton, Jr., Dawn-Marie Driscoll, Peter B. Freeman, George M.
Lovejoy, Jr., Dr. Wesley W. Marple, Jr., Daniel Pierce, Kathryn L. Quirk and
Jean C. Tempel.
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.)
--------------------------------------------------
[continued on other side]
<PAGE>
3. To approve the Board's discretionary
authority to convert the Fund to a
master/feeder fund structure through
a sale or transfer of assets or
otherwise; FOR [ ] AGAINST [ ] ABSTAIN [ ]
4(A). To approve certain provisions of the
Amended and Restated Declaration of
Trust; FOR [ ] AGAINST [ ] ABSTAIN [ ]
4(B). To approve certain provisions of the
Amended and Restated Declaration of
Trust; FOR [ ] AGAINST [ ] ABSTAIN [ ]
5. To approve the revision of certain
fundamental investment policies; FOR [ ] AGAINST [ ] ABSTAIN [ ]
6. Ratification of the selection of
Coopers & Lybrand L.L.P. as the
Fund's independent accountants. FOR [ ] AGAINST [ ] ABSTAIN [ ]
The proxies are authorized to vote in their discretion on any other
business which may properly come before the meeting and any adjournments
thereof.
Please sign exactly as your name or names
appear. When signing as attorney, executor,
administrator, trustee or guardian, please
give your full title as such.
---------------------------------------------
(Signature of Shareholder)
---------------------------------------------
(Signature of joint owner, if any)
Dated ___________________, 1997
PLEASE SIGN AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.
NO POSTAGE IS REQUIRED.
<PAGE>
PROXY PROXY
SCUDDER CASH INVESTMENT TRUST
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
Special Meeting of Shareholders - October 24, 1997
The undersigned hereby appoints [ ], [ ] and [ ] and each of them, the
proxies of the undersigned, with the power of substitution to each of them, to
vote all shares of the Fund which the undersigned is entitled to vote at the
Special Meeting of Shareholders of the Fund to be held at the offices of
Scudder, Stevens & Clark, Inc., Two International Place, Boston Massachusetts
02110, on October 24, 1997 at 9:30 a.m., eastern time, and at any adjournments
thereof.
Unless otherwise specified in the squares provided, the undersigned's vote
will be cast FOR each numbered item listed below.
The Board members of your Fund, including those who are not affiliated with
the Fund or Scudder, recommend that you vote FOR each item.
1. To approve the new Investment Management
Agreement between the Fund and Scudder
Kemper Investments, Inc.; FOR [ ] AGAINST [ ] ABSTAIN [ ]
2. The election of Trustees;
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the contrary to vote for all nominees
below) [ ] listed below [ ]
Nominees: Henry P. Becton, Jr., Dawn-Marie Driscoll, Peter B. Freeman, George M.
Lovejoy, Jr., Dr. Wesley W. Marple, Jr., Daniel Pierce, Kathryn L. Quirk and
Jean C. Tempel.
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.)
--------------------------------------------------
[continued on other side]
<PAGE>
3. To approve the Board's discretionary
authority to convert the Fund to a
master/feeder fund structure through
a sale or transfer of assets or
otherwise; FOR [ ] AGAINST [ ] ABSTAIN [ ]
4(A). To approve certain provisions of the
Amended and Restated Declaration of
Trust; FOR [ ] AGAINST [ ] ABSTAIN [ ]
4(B). To approve certain provisions of the
Amended and Restated Declaration of
Trust; FOR [ ] AGAINST [ ] ABSTAIN [ ]
5. To approve the revision of certain
fundamental investment policies; FOR [ ] AGAINST [ ] ABSTAIN [ ]
6. Ratification of the selection of
Coopers & Lybrand L.L.P. as the
Fund's independent accountants. FOR [ ] AGAINST [ ] ABSTAIN [ ]
The proxies are authorized to vote in their discretion on any other
business which may properly come before the meeting and any adjournments
thereof.
Please sign exactly as your name or names
appear. When signing as attorney, executor,
administrator, trustee or guardian, please
give your full title as such.
---------------------------------------------
(Signature of Shareholder)
---------------------------------------------
(Signature of joint owner, if any)
Dated ___________________, 1997
PLEASE SIGN AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.
NO POSTAGE IS REQUIRED.
<PAGE>
PROXY PROXY
SCUDDER CLASSIC GROWTH FUND
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
Special Meeting of Shareholders - October 24, 1997
The undersigned hereby appoints [ ], [ ] and [ ] and each of them, the
proxies of the undersigned, with the power of substitution to each of them, to
vote all shares of the Fund which the undersigned is entitled to vote at the
Special Meeting of Shareholders of the Fund to be held at the offices of
Scudder, Stevens & Clark, Inc., Two International Place, Boston Massachusetts
02110, on October 24, 1997 at 9:30 a.m., eastern time, and at any adjournments
thereof.
Unless otherwise specified in the squares provided, the undersigned's vote
will be cast FOR each numbered item listed below.
The Board members of your Fund, including those who are not affiliated with
the Fund or Scudder, recommend that you vote FOR each item.
1. To approve the new Investment Management
Agreement between the Fund and Scudder
Kemper Investments, Inc.; FOR [ ] AGAINST [ ] ABSTAIN [ ]
2. The election of Trustees;
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the contrary to vote for all nominees
below) [ ] listed below [ ]
Nominees: Henry P. Becton, Jr., Dawn-Marie Driscoll, Peter B. Freeman, George M.
Lovejoy, Jr., Dr. Wesley W. Marple, Jr., Daniel Pierce, Kathryn L. Quirk and
Jean C. Tempel.
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.)
--------------------------------------------------
[continued on other side]
<PAGE>
3. To approve the Board's discretionary
authority to convert the Fund to a
master/feeder fund structure through
a sale or transfer of assets or
otherwise; FOR [ ] AGAINST [ ] ABSTAIN [ ]
4(A). To approve certain provisions of the
Amended and Restated Declaration of
Trust; FOR [ ] AGAINST [ ] ABSTAIN [ ]
4(B). To approve certain provisions of the
Amended and Restated Declaration of
Trust; FOR [ ] AGAINST [ ] ABSTAIN [ ]
5. To approve the revision of certain
fundamental investment policies; FOR [ ] AGAINST [ ] ABSTAIN [ ]
6. Ratification of the selection of
Coopers & Lybrand L.L.P. as the
Fund's independent accountants. FOR [ ] AGAINST [ ] ABSTAIN [ ]
The proxies are authorized to vote in their discretion on any other
business which may properly come before the meeting and any adjournments
thereof.
Please sign exactly as your name or names
appear. When signing as attorney, executor,
administrator, trustee or guardian, please
give your full title as such.
---------------------------------------------
(Signature of Shareholder)
---------------------------------------------
(Signature of joint owner, if any)
Dated ___________________, 1997
PLEASE SIGN AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.
NO POSTAGE IS REQUIRED.
<PAGE>
PROXY PROXY
SCUDDER GNMA FUND
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
Special Meeting of Shareholders - October 24, 1997
The undersigned hereby appoints [ ], [ ] and [ ] and each of them, the
proxies of the undersigned, with the power of substitution to each of them, to
vote all shares of the Fund which the undersigned is entitled to vote at the
Special Meeting of Shareholders of the Fund to be held at the offices of
Scudder, Stevens & Clark, Inc., Two International Place, Boston Massachusetts
02110, on October 24, 1997 at 9:30 a.m., eastern time, and at any adjournments
thereof.
Unless otherwise specified in the squares provided, the undersigned's vote
will be cast FOR each numbered item listed below.
The Board members of your Fund, including those who are not affiliated with
the Fund or Scudder, recommend that you vote FOR each item.
1. To approve the new Investment Management
Agreement between the Fund and Scudder
Kemper Investments, Inc.; FOR [ ] AGAINST [ ] ABSTAIN [ ]
2. The election of Trustees;
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the contrary to vote for all nominees
below) [ ] listed below [ ]
Nominees: Henry P. Becton, Jr., Dawn-Marie Driscoll, Peter B. Freeman, George M.
Lovejoy, Jr., Dr. Wesley W. Marple, Jr., Daniel Pierce, Kathryn L. Quirk and
Jean C. Tempel.
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.)
--------------------------------------------------
[continued on other side]
<PAGE>
3. To approve the Board's discretionary
authority to convert the Fund to a
master/feeder fund structure through
a sale or transfer of assets or
otherwise; FOR [ ] AGAINST [ ] ABSTAIN [ ]
4(A). To approve certain provisions of the
Amended and Restated Declaration of
Trust; FOR [ ] AGAINST [ ] ABSTAIN [ ]
4(B). To approve certain provisions of the
Amended and Restated Declaration of
Trust; FOR [ ] AGAINST [ ] ABSTAIN [ ]
5. To approve the revision of certain
fundamental investment policies; FOR [ ] AGAINST [ ] ABSTAIN [ ]
6. Ratification of the selection of
Coopers & Lybrand L.L.P. as the
Fund's independent accountants. FOR [ ] AGAINST [ ] ABSTAIN [ ]
The proxies are authorized to vote in their discretion on any other
business which may properly come before the meeting and any adjournments
thereof.
Please sign exactly as your name or names
appear. When signing as attorney, executor,
administrator, trustee or guardian, please
give your full title as such.
---------------------------------------------
(Signature of Shareholder)
---------------------------------------------
(Signature of joint owner, if any)
Dated ___________________, 1997
PLEASE SIGN AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.
NO POSTAGE IS REQUIRED.
<PAGE>
PROXY PROXY
SCUDDER GROWTH AND INCOME FUND
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
Special Meeting of Shareholders - October 24, 1997
The undersigned hereby appoints [ ], [ ] and [ ] and each of them, the
proxies of the undersigned, with the power of substitution to each of them, to
vote all shares of the Fund which the undersigned is entitled to vote at the
Special Meeting of Shareholders of the Fund to be held at the offices of
Scudder, Stevens & Clark, Inc., Two International Place, Boston Massachusetts
02110, on October 24, 1997 at 9:30 a.m., eastern time, and at any adjournments
thereof.
Unless otherwise specified in the squares provided, the undersigned's vote
will be cast FOR each numbered item listed below.
The Board members of your Fund, including those who are not affiliated with
the Fund or Scudder, recommend that you vote FOR each item.
1. To approve the new Investment Management
Agreement between the Fund and Scudder
Kemper Investments, Inc.; FOR [ ] AGAINST [ ] ABSTAIN [ ]
2. The election of Trustees;
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the contrary to vote for all nominees
below) [ ] listed below [ ]
Nominees: Henry P. Becton, Jr., Dawn-Marie Driscoll, Peter B. Freeman, George M.
Lovejoy, Jr., Dr. Wesley W. Marple, Jr., Daniel Pierce, Kathryn L. Quirk and
Jean C. Tempel.
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.)
--------------------------------------------------
[continued on other side]
<PAGE>
3. To approve the Board's discretionary
authority to convert the Fund to a
master/feeder fund structure through
a sale or transfer of assets or
otherwise; FOR [ ] AGAINST [ ] ABSTAIN [ ]
4(A). To approve certain provisions of the
Amended and Restated Declaration of
Trust; FOR [ ] AGAINST [ ] ABSTAIN [ ]
4(B). To approve certain provisions of the
Amended and Restated Declaration of
Trust; FOR [ ] AGAINST [ ] ABSTAIN [ ]
5. To approve the revision of certain
fundamental investment policies; FOR [ ] AGAINST [ ] ABSTAIN [ ]
6. Ratification of the selection of
Coopers & Lybrand L.L.P. as the
Fund's independent accountants. FOR [ ] AGAINST [ ] ABSTAIN [ ]
The proxies are authorized to vote in their discretion on any other
business which may properly come before the meeting and any adjournments
thereof.
Please sign exactly as your name or names
appear. When signing as attorney, executor,
administrator, trustee or guardian, please
give your full title as such.
---------------------------------------------
(Signature of Shareholder)
---------------------------------------------
(Signature of joint owner, if any)
Dated ___________________, 1997
PLEASE SIGN AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.
NO POSTAGE IS REQUIRED.
<PAGE>
PROXY PROXY
SCUDDER HIGH YIELD BOND FUND
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
Special Meeting of Shareholders - October 24, 1997
The undersigned hereby appoints [ ], [ ] and [ ] and each of them, the
proxies of the undersigned, with the power of substitution to each of them, to
vote all shares of the Fund which the undersigned is entitled to vote at the
Special Meeting of Shareholders of the Fund to be held at the offices of
Scudder, Stevens & Clark, Inc., Two International Place, Boston Massachusetts
02110, on October 24, 1997 at 9:30 a.m., eastern time, and at any adjournments
thereof.
Unless otherwise specified in the squares provided, the undersigned's vote
will be cast FOR each numbered item listed below.
The Board members of your Fund, including those who are not affiliated with
the Fund or Scudder, recommend that you vote FOR each item.
1. To approve the new Investment Management
Agreement between the Fund and Scudder
Kemper Investments, Inc.; FOR [ ] AGAINST [ ] ABSTAIN [ ]
2. The election of Trustees;
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the contrary to vote for all nominees
below) [ ] listed below [ ]
Nominees: Henry P. Becton, Jr., Dawn-Marie Driscoll, Peter B. Freeman, George M.
Lovejoy, Jr., Dr. Wesley W. Marple, Jr., Daniel Pierce, Kathryn L. Quirk and
Jean C. Tempel.
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.)
--------------------------------------------------
[continued on other side]
<PAGE>
3. To approve the Board's discretionary
authority to convert the Fund to a
master/feeder fund structure through
a sale or transfer of assets or
otherwise; FOR [ ] AGAINST [ ] ABSTAIN [ ]
4(A). To approve certain provisions of the
Amended and Restated Declaration of
Trust; FOR [ ] AGAINST [ ] ABSTAIN [ ]
4(B). To approve certain provisions of the
Amended and Restated Declaration of
Trust; FOR [ ] AGAINST [ ] ABSTAIN [ ]
5. To approve the revision of certain
fundamental investment policies; FOR [ ] AGAINST [ ] ABSTAIN [ ]
6. Ratification of the selection of
Coopers & Lybrand L.L.P. as the
Fund's independent accountants. FOR [ ] AGAINST [ ] ABSTAIN [ ]
The proxies are authorized to vote in their discretion on any other
business which may properly come before the meeting and any adjournments
thereof.
Please sign exactly as your name or names
appear. When signing as attorney, executor,
administrator, trustee or guardian, please
give your full title as such.
---------------------------------------------
(Signature of Shareholder)
---------------------------------------------
(Signature of joint owner, if any)
Dated ___________________, 1997
PLEASE SIGN AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.
NO POSTAGE IS REQUIRED.
<PAGE>
PROXY PROXY
SCUDDER INCOME FUND
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
Special Meeting of Shareholders - October 24, 1997
The undersigned hereby appoints [ ], [ ] and [ ] and each of them, the
proxies of the undersigned, with the power of substitution to each of them, to
vote all shares of the Fund which the undersigned is entitled to vote at the
Special Meeting of Shareholders of the Fund to be held at the offices of
Scudder, Stevens & Clark, Inc., Two International Place, Boston Massachusetts
02110, on October 24, 1997 at 9:30 a.m., eastern time, and at any adjournments
thereof.
Unless otherwise specified in the squares provided, the undersigned's vote
will be cast FOR each numbered item listed below.
The Board members of your Fund, including those who are not affiliated with
the Fund or Scudder, recommend that you vote FOR each item.
1. To approve the new Investment Management
Agreement between the Fund and Scudder
Kemper Investments, Inc.; FOR [ ] AGAINST [ ] ABSTAIN [ ]
2. The election of Trustees;
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the contrary to vote for all nominees
below) [ ] listed below [ ]
Nominees: Henry P. Becton, Jr., Dawn-Marie Driscoll, Peter B. Freeman, George M.
Lovejoy, Jr., Dr. Wesley W. Marple, Jr., Daniel Pierce, Kathryn L. Quirk and
Jean C. Tempel.
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.)
--------------------------------------------------
[continued on other side]
<PAGE>
3. To approve the Board's discretionary
authority to convert the Fund to a
master/feeder fund structure through
a sale or transfer of assets or
otherwise; FOR [ ] AGAINST [ ] ABSTAIN [ ]
4(A). To approve certain provisions of the
Amended and Restated Declaration of
Trust; FOR [ ] AGAINST [ ] ABSTAIN [ ]
4(B). To approve certain provisions of the
Amended and Restated Declaration of
Trust; FOR [ ] AGAINST [ ] ABSTAIN [ ]
5. To approve the revision of certain
fundamental investment policies; FOR [ ] AGAINST [ ] ABSTAIN [ ]
6. Ratification of the selection of
Coopers & Lybrand L.L.P. as the
Fund's independent accountants. FOR [ ] AGAINST [ ] ABSTAIN [ ]
The proxies are authorized to vote in their discretion on any other
business which may properly come before the meeting and any adjournments
thereof.
Please sign exactly as your name or names
appear. When signing as attorney, executor,
administrator, trustee or guardian, please
give your full title as such.
---------------------------------------------
(Signature of Shareholder)
---------------------------------------------
(Signature of joint owner, if any)
Dated ___________________, 1997
PLEASE SIGN AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.
NO POSTAGE IS REQUIRED.
<PAGE>
PROXY PROXY
SCUDDER LARGE COMPANY GROWTH FUND
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
Special Meeting of Shareholders - October 24, 1997
The undersigned hereby appoints [ ], [ ] and [ ] and each of them, the
proxies of the undersigned, with the power of substitution to each of them, to
vote all shares of the Fund which the undersigned is entitled to vote at the
Special Meeting of Shareholders of the Fund to be held at the offices of
Scudder, Stevens & Clark, Inc., Two International Place, Boston Massachusetts
02110, on October 24, 1997 at 9:30 a.m., eastern time, and at any adjournments
thereof.
Unless otherwise specified in the squares provided, the undersigned's vote
will be cast FOR each numbered item listed below.
The Board members of your Fund, including those who are not affiliated with
the Fund or Scudder, recommend that you vote FOR each item.
1. To approve the new Investment Management
Agreement between the Fund and Scudder
Kemper Investments, Inc.; FOR [ ] AGAINST [ ] ABSTAIN [ ]
2. The election of Trustees;
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the contrary to vote for all nominees
below) [ ] listed below [ ]
Nominees: Henry P. Becton, Jr., Dawn-Marie Driscoll, Peter B. Freeman, George M.
Lovejoy, Jr., Dr. Wesley W. Marple, Jr., Daniel Pierce, Kathryn L. Quirk and
Jean C. Tempel.
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.)
--------------------------------------------------
[continued on other side]
<PAGE>
3. To approve the Board's discretionary
authority to convert the Fund to a
master/feeder fund structure through
a sale or transfer of assets or
otherwise; FOR [ ] AGAINST [ ] ABSTAIN [ ]
4(A). To approve certain provisions of the
Amended and Restated Declaration of
Trust; FOR [ ] AGAINST [ ] ABSTAIN [ ]
4(B). To approve certain provisions of the
Amended and Restated Declaration of
Trust; FOR [ ] AGAINST [ ] ABSTAIN [ ]
5. To approve the revision of certain
fundamental investment policies; FOR [ ] AGAINST [ ] ABSTAIN [ ]
6. Ratification of the selection of
Coopers & Lybrand L.L.P. as the
Fund's independent accountants. FOR [ ] AGAINST [ ] ABSTAIN [ ]
The proxies are authorized to vote in their discretion on any other
business which may properly come before the meeting and any adjournments
thereof.
Please sign exactly as your name or names
appear. When signing as attorney, executor,
administrator, trustee or guardian, please
give your full title as such.
---------------------------------------------
(Signature of Shareholder)
---------------------------------------------
(Signature of joint owner, if any)
Dated ___________________, 1997
PLEASE SIGN AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.
NO POSTAGE IS REQUIRED.
<PAGE>
PROXY PROXY
SCUDDER U.S. TREASURY MONEY FUND
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
Special Meeting of Shareholders - October 24, 1997
The undersigned hereby appoints [ ], [ ] and [ ] and each of them, the
proxies of the undersigned, with the power of substitution to each of them, to
vote all shares of the Fund which the undersigned is entitled to vote at the
Special Meeting of Shareholders of the Fund to be held at the offices of
Scudder, Stevens & Clark, Inc., Two International Place, Boston Massachusetts
02110, on October 24, 1997 at 9:30 a.m., eastern time, and at any adjournments
thereof.
Unless otherwise specified in the squares provided, the undersigned's vote
will be cast FOR each numbered item listed below.
The Board members of your Fund, including those who are not affiliated with
the Fund or Scudder, recommend that you vote FOR each item.
1. To approve the new Investment Management
Agreement between the Fund and Scudder
Kemper Investments, Inc.; FOR [ ] AGAINST [ ] ABSTAIN [ ]
2. The election of Trustees;
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the contrary to vote for all nominees
below) [ ] listed below [ ]
Nominees: Henry P. Becton, Jr., Dawn-Marie Driscoll, Peter B. Freeman, George M.
Lovejoy, Jr., Dr. Wesley W. Marple, Jr., Daniel Pierce, Kathryn L. Quirk and
Jean C. Tempel.
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.)
--------------------------------------------------
[continued on other side]
<PAGE>
3. To approve the Board's discretionary
authority to convert the Fund to a
master/feeder fund structure through
a sale or transfer of assets or
otherwise; FOR [ ] AGAINST [ ] ABSTAIN [ ]
4(A). To approve certain provisions of the
Amended and Restated Declaration of
Trust; FOR [ ] AGAINST [ ] ABSTAIN [ ]
4(B). To approve certain provisions of the
Amended and Restated Declaration of
Trust; FOR [ ] AGAINST [ ] ABSTAIN [ ]
5. To approve the revision of certain
fundamental investment policies; FOR [ ] AGAINST [ ] ABSTAIN [ ]
6. Ratification of the selection of
Coopers & Lybrand L.L.P. as the
Fund's independent accountants. FOR [ ] AGAINST [ ] ABSTAIN [ ]
The proxies are authorized to vote in their discretion on any other
business which may properly come before the meeting and any adjournments
thereof.
Please sign exactly as your name or names
appear. When signing as attorney, executor,
administrator, trustee or guardian, please
give your full title as such.
---------------------------------------------
(Signature of Shareholder)
---------------------------------------------
(Signature of joint owner, if any)
Dated ___________________, 1997
PLEASE SIGN AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.
NO POSTAGE IS REQUIRED.
<PAGE>
