As filed with the Securities and Exchange Commission on October 29, 1998
File Nos. 33-69686
811-8064
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 37
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 38
THE MONTGOMERY FUNDS II
(Exact Name of Registrant as Specified in its Charter)
101 California Street
San Francisco, California 94111
(Address of Principal Executive Office)
(415) 572-3863
(Registrant's Telephone Number, Including Area Code)
Greg M. Siemons, Assistant Secretary
101 California Street
San Francisco, California 94111
(Name and Address of Agent for Service)
-------------------------
It is proposed that this filing will become effective:
_X_ immediately upon filing pursuant to Rule 485(b)
___ on _____________ pursuant to Rule 485(b)
___ 60 days after filing pursuant to Rule 485(a)(1)
___ 75 days after filing pursuant to Rule 485(a)(2)
___ on ______________ pursuant to Rule 485(a)
----------
Please Send Copy of Communications to:
JULIE ALLECTA, ESQ.
DAVID A. HEARTH, ESQ.
Paul, Hastings, Janofsky & Walker LLP
345 California Street
San Francisco, California 94104
(415) 835-1600
<PAGE>
THE MONTGOMERY FUNDS II
CONTENTS OF REGISTRATION STATEMENT
This registration statement contains the following documents:
Facing Sheet
Contents of Registration Statement
Cross-Reference Sheets for Class A, Class B and Class C shares of
Montgomery Tax-Managed Growth Fund, Montgomery U.S. Market
Neutral Fund and Montgomery U.S. Long-Short Fund are hereby
incorporated by reference to Post-Effective Amendments
previously filed with the Commission.
Part A - Prospectuses for Class A, Class B and Class C shares of
Montgomery Tax-Managed Growth Fund, Montgomery U.S. Market
Neutral Fund and Montgomery U.S. Long-Short Fund are hereby
incorporated by reference to Post-Effective Amendments
previously filed with the Commission.
Part B - Statement of Additional Information for Class A, Class B
and Class C shares of Montgomery Tax-Managed Growth Fund,
Montgomery U.S. Market Neutral Fund and Montgomery U.S.
Long-Short Fund are hereby incorporated by reference to
Post-Effective Amendments previously filed with the
Commission.
Part C - Other Information
Signature Page
Exhibits
<PAGE>
THE MONTGOMERY FUNDS II
CROSS REFERENCE SHEET
FORM N-1A
Part A: Information Required in Prospectus
(Prospectus for Class A, Class B and Class C shares of
Montgomery Tax-Managed Growth Fund,
Montgomery U.S. Market Neutral Fund and
Montgomery U.S. Long-Short Fund)
The cross-reference sheets for the Prospectuses for Class A, Class B
and Class C shares of Montgomery Tax-Managed Growth Fund, Montgomery U.S. Market
Neutral Fund and Montgomery U.S. Long-Short Fund are hereby incorporated by
reference to Post-Effective Amendments previously filed with the Commission.
<PAGE>
PART B: Information Required in
Statement of Additional Information
(Statement of Additional Information for
Class A, Class B and Class C Shares for
Montgomery Tax-Managed Growth Fund,
Montgomery U.S. Market Neutral Fund and
Montgomery U.S. Long-Short Fund)
The cross-reference sheets for the Statements of Additional Information
for Class A, Class B and Class C shares of Montgomery Tax-Managed Growth Fund,
Montgomery U.S. Market Neutral Fund and Montgomery U.S. Long-Short Fund are
hereby incorporated by reference to Post-Effective Amendments previously filed
with the Commission.
<PAGE>
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PART A
PROSPECTUS FOR CLASS A, CLASS B AND CLASS C SHARES
OF MONTGOMERY TAX-MANAGED GROWTH FUND,
MONTGOMERY U.S. MARKET NEUTRAL FUND
AND
MONTGOMERY U.S. LONG-SHORT FUND
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<PAGE>
THE MONTGOMERY FUNDS II
MONTGOMERY TAX-MANAGED GROWTH FUND,
MONTGOMERY U.S. MARKET NEUTRAL FUND
AND
MONTGOMERY U.S. LONG-SHORT FUND
Effective October 29, 1998, the disclosure for each of the following
three non-operational series is removed from the registration statement and each
series will be undesignated as a series of The Montgomery Funds II: Montgomery
Tax-Managed Growth Fund, Montgomery U.S. Market Neutral Fund and Montgomery U.S.
Long-Short Fund. A Prospectus with respect to each of the above named series has
been previously filed with the Commission.
<PAGE>
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PART B
STATEMENT OF ADDITIONAL INFORMATION FOR CLASS A, CLASS B AND CLASS C SHARES
OF MONTGOMERY TAX-MANAGED GROWTH FUND,
MONTGOMERY U.S. MARKET NEUTRAL FUND
AND
MONTGOMERY U.S. LONG-SHORT FUND
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<PAGE>
THE MONTGOMERY FUNDS II
MONTGOMERY TAX-MANAGED GROWTH FUND,
MONTGOMERY U.S. MARKET NEUTRAL FUND
AND
MONTGOMERY U.S. LONG-SHORT FUND
Effective October 29, 1998, the disclosure for each of the following
three non-operational series is removed from the registration statement and each
series will be undesignated as a series of The Montgomery Funds II: Montgomery
Tax-Managed Growth Fund, Montgomery U.S. Market Neutral Fund and Montgomery U.S.
Long-Short Fund. A Statement of Additional Infomation with respect to each of
the above-named series has been previously filed with the Commission.
<PAGE>
----------------------------------------------------
PART C
OTHER INFORMATION
---------------------------------------------------
<PAGE>
THE MONTGOMERY FUNDS II
--------------
FORM N-1A
--------------
PART C
--------------
Item 23. Exhibits:
(a) Amended and Restated Agreement and Declaration of Trust.
(b) Amended and Restated By-Laws.
(c) Instruments Defining Rights of Securities Holders--Not
applicable.
(d) Investment Advisory Contracts--Form of Investment Management
Agreement is incorporated by reference to Post-Effective
Amendment No. 22 to the Registration Statement as filed with
the Commission on July 31, 1997 ("Post-Effective Amendment No.
22").
(e) Form of Underwriting Agreement is incorporated by reference to
Post-Effective Amendment No. 22.
(f) Bonus or Profit Sharing Contracts--Not applicable.
(g) Form of Custody Agreement.
(h) Other Material Contracts:
(1) Form of Administrative Services Agreement is
incorporated by reference to Post-Effective Amendment
No. 22.
(2) Form of Shareholder Services Plan
(i) Opinion of Counsel as to legality of shares.
(j) Other Opinions: Independent Auditors' Consent--Not applicable
(k) Omitted Financial Statements--Not applicable.
(l) Initial Capital Agreements: Form of Subscription Agreement re:
Initial Shares.
(m) Rule 12b-1 Plan: Form of Share Marketing Plan (Rule 12b-1
Plan) is incorporated by reference to Post-Effective Amendment
No. 22.
(n) Financial Data Schedules are incorporated by reference to Form
NSAR-B filed on August 28, 1998.
(o) 18f-3 Plan - Form of Multiple Class Plan.
C-1
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Item 24. Persons Controlled by or Under Common Control with Registrant.
Montgomery Asset Management, LLC, a Delaware limited liability
company, is the manager of each series of the Registrant, of The
Montgomery Funds, a Massachusetts business trust, and of The Montgomery
Funds III, a Delaware business trust. Montgomery Asset Management, LLC
is a subsidiary of Commerzbank A.G. based in Frankfurt, Germany. The
Registrant, The Montgomery Funds and The Montgomery Funds III are
deemed to be under the common control of each of those two entities.
Item 25. Indemnification
Article VII of the Agreement and Declaration of Trust empowers
the Trustees of the Trust, to the full extent permitted by law, to
purchase with Trust assets insurance for indemnification from liability
and to pay for all expenses reasonably incurred or paid or expected to
be paid by a Trustee or officer in connection with any claim, action,
suit or proceeding in which he or she becomes involved by virtue of his
or her capacity or former capacity with the Trust.
Article VI of the By-Laws of the Trust provides that the Trust
shall indemnify any person who was or is a party or is threatened to be
made a party to any proceeding by reason of the fact that such person
is and other amounts or was an agent of the Trust, against expenses,
judgments, fines, settlement and other amounts actually and reasonable
incurred in connection with such proceeding if that person acted in
good faith and reasonably believed his or her conduct to be in the best
interests of the Trust. Indemnification will not be provided in certain
circumstances, however, including instances of willful misfeasance, bad
faith, gross negligence, and reckless disregard of the duties involved
in the conduct of the particular office involved.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended (the "33 Act"), may be permitted to
the Trustees, officers and controlling persons of the Registrant
pursuant to the foregoing provisions or otherwise, the Registrant has
been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed
in the 33 Act and is, therefore, unenforceable in the event that a
claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a Trustee,
officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such Trustee,
officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the 33 Act and will be
governed by the final adjudication of such issue.
Item 26. Business and Other Connections of Investment Adviser.
Effective July 31, 1997, Montgomery Asset Management, L.P.
completed the sale of substantially all of its assets to the current
investment manager, Montgomery Asset Management, LLC ("MAM, LLC"), a
subsidiary of Commerzbank A.G. Information about the officers and
directors of MAM, LLC is provided below. The address for the following
persons is 101 California Street, San Francisco, California 94111.
C-2
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R. Stephen Doyle Chairman of the Board of Directors and
Chief Executive Officer of MAM, LLC
Mark B. Geist President and Director of MAM, LLC
John T. Story Executive Vice President of MAM, LLC
David E. Demarest Chief Administrative Officer and
Managing Director of MAM, LLC
The following directors of MAM, LLC also are officers of
Commerzbank AG. The address for the following persons is Neue Mainzer
Strasse 32-36, Frankfurt am Main, Germany.
Heinz Josef Hockmann Director of MAM, LLC
Dietrich-Kurt Frowein Director of MAM, LLC
Andreas Kleffel Director of MAM, LLC
Before July 31, 1997, Montgomery Securities, which is a
broker-dealer and the prior principal underwriter of The Montgomery
Funds II, was the sole limited partner of the prior investment manager,
Montgomery Asset Management, L.P. ("MAM, L.P."). The general partner of
MAM, L.P. was a corporation, Montgomery Asset Management, Inc. ("MAM,
Inc."), certain of the officers and directors of which now serve in
similar capacities for MAM, LLC.
Item 27. Principal Underwriter
(a) Funds Distributor, Inc. (the "Distributor") acts as principal underwriter
for the following investment companies:
American Century California Tax-Free and Municipal Funds
American Century Capital portfolios, Inc.
American Century Government Income Trust
American Century International Bond Funds
American Century Investment Trust
American Century Municipal Trust
American Century Mutual Funds, Inc.
American Century Premium Reserves, Inc.
American Century Quantitative Equity Funds
American Century Strategic Asset Allocations, Inc.
American Century Target Maturities Trust
American Century Variable Portfolios, Inc.
American Century World Mutual Funds, Inc.
BJB Investment Funds
The Brinson Funds
The Harris Insight Funds Trust
HT Insight Funds, Inc.
J.P. Morgan Institutional Funds
J.P. Morgan Funds
J.P. Morgan Series Trust
J.P. Morgan Series Trust II
Kobrick-Cendant Investment Trust
LaSalle Partners Funds, Inc.
Monetta Fund, Inc.
Monetta Trust
The Montgomery Funds
The Montgomery Funds II
The Munder Framlington Funds Trust
the Munder Funds Trust
The Orbitex Group of Funds
PanAgora Institutional Funds
Dresdner RCM Capital Funds, Inc.
C-3
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Dresdner RCM Equity Funds, Inc.
St. Clair Money Market Fund, Inc.
The Skyline Funds
Waterhouse Investors Cash Management Fund, Inc.
WEBS Index Fund, Inc.
Funds Distributor is registered with the Securities and Exchange Commission as a
broker-dealer and is a member of the National Association of Securities Dealers.
Funds Distributor is an indirect wholly-owned subsidiary of Boston Institutional
Group, Inc., a holding company of all whose outstanding shares are owned by key
employees.
(b) The following is a list of the executive officers of Funds Distributor, Inc.
President and Chief Executive Officer - Mario E. Connolly
President and Treasurer George A. Rio
Executive Vice President - Donald R. Roberson
Senior Vice President - Allen B. Closser
Senior Vice President - Paula K. David
Senior Vice President - Michael S. Petrucelli
Senior Vice President, Treasurer
and Chief Financial Officer - Joseph F. Tower, III
Senior Vice President - Bernard A. Whalen
Secretary Margaret W. Chambers
(c) Not Applicable.
Item 28. Location of Accounts and Records.
The accounts, books, or other documents required to be
maintained by Section 31(a) of the Investment Company Act of 1940 will
be kept by the Registrant's Transfer Agent, DST Systems, Inc., P.O. Box
1004 Baltimore, Kansas City, Missouri 64105, except those records
relating to portfolio transactions and the basic organizational and
Trust documents of the Registrant (see Subsections (2)(iii), (4), (5),
(6), (7), (9), (10) and (11) of Rule 31a-1(b)), which will be kept by
the Registrant at 600 Montgomery Street, San Francisco, California
94111.
Item 29. Management Services.
There are no management-related service contracts not
discussed in Parts A and B.
Item 30. Undertakings.
(a) Not applicable.
(b) Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's last
annual report to Shareholders, upon request and without
charge.
(c) Registrant has undertaken to comply with Section 16(a) of the
Investment Company Act of 1940, as amended, which requires the
prompt convening of a meeting of shareholders to elect
trustees to fill existing vacancies in the Registrant's Board
of Trustees in the event that less than a majority of the
trustees have been elected to such position by shareholders.
Registrant has also undertaken promptly to call a meeting of
shareholders for the purpose of voting upon the question of
removal of any Trustee or Trustees when requested in writing
to do so by the record holders of not less than 10 percent of
the Registrant's outstanding shares and to assist its
shareholders in communicating with other shareholders in
accordance with the requirements of Section 16(c) of the
Investment Company Act of 1940, as amended.
C-4
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Amendment pursuant to Rule 485(b)
under the Securities Act of 1933, as amended, and that the Registrant has duly
caused this Amendment to Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of San Francisco, the
State of California, on this 26th day of October, 1998.
THE MONTGOMERY FUNDS II
By: Margaret W. Chambers*
-------------------------------
Margaret W. Chambers
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to Registrant's Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
R. Stephen Doyle * Trustee October 26, 1998
- ------------------
R. Stephen Doyle
Andrew Cox * Trustee October 26, 1998
- ------------
Andrew Cox
Cecilia H. Herbert * Trustee October 26, 1998
- --------------------
Cecilia H. Herbert
John A. Farnsworth * Trustee October 26, 1998
- --------------------
John A. Farnsworth
* By: /s/ Julie Allecta
-----------------
Julie Allecta, Attorney-in-Fact
pursuant to Powers of Attorney previously filed.
C-5
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Item 23 (a)
Amended and Restated
Agreement and Declaration of Trust
- --------------------------------------------------------------------------------
<PAGE>
AMENDED AND RESTATED
AGREEMENT AND DECLARATION OF TRUST
OF
THE MONTGOMERY FUNDS II
(formerly "Montgomery Investment Trust")
A Delaware Business Trust
Principal Place of Business
600 Montgomery Street
San Francisco, California 94111
<PAGE>
TABLE OF CONTENTS
PAGE
----
ARTICLE I. ................................................................ 1
SECTION 1. NAME .................................................. 1
SECTION 2. DEFINITIONS ........................................... 1
ARTICLE II. ............................................................... 3
ARTICLE III. .............................................................. 3
SECTION 1. DIVISION OF BENEFICIAL INTEREST ....................... 3
SECTION 2. OWNERSHIP OF SHARES ................................... 4
SECTION 3. TRANSFER OF SHARES .................................... 5
SECTION 4. INVESTMENTS IN THE TRUST .............................. 5
SECTION 5. STATUS OF SHARES AND LIMITATION OF PERSONAL
LIABILITY ............................................. 5
SECTION 6. POWER OF BOARD OF TRUSEES TO CHANGE PROVISIONS
RELATING TO SHARES .................................... 5
SECTION 7. ESTABLISHMENT AND DESIGNATION OF SERIES ............... 6
ARTICLE IV. ............................................................... 9
SECTION 1. NUMBER, ELECTION AND TENURE ........................... 9
SECTION 2. EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE ....... 9
SECTION 3. POWERS ................................................ 9
SECTION 4. PAYMENT OF EXPENSES BY THE TRUST ...................... 13
SECTION 5. PAYMENT OF EXPENSES BY SHAREHOLDERS ................... 13
SECTION 6. OWNERSHIP OF ASSETS OF THE TRUST ...................... 13
SECTION 7. SERVICE CONTRACTS ..................................... 14
SECTION 8. TRUSTEES AND OFFICERS-AS SHAREHOLDERS ................. 15
ARTICLE V. ................................................................ 15
SECTION 1. VOTING POWERS ......................................... 15
SECTION 2. VOTING POWER AND MEETINGS ............................. 16
SECTION 3. QUORUM AND REQUIRED VOTE .............................. 16
SECTION 4. ACTION BY WRITTEN CONSENT ............................. 16
SECTION 5. RECORD DATES .......................................... 17
SECTION 6. ADDITIONAL-PROVISIONS ................................. 17
ARTICLE VI. ............................................................... 17
SECTION 1. DETERMINATION OF NET ASSET VALUE, NET INCOME AND
DISTRIBUTIONS ......................................... 17
SECTION 2. REDEMPTIONS AND REPURCHASES ........................... 17
SECTION 3. REDEMPTIONS AT THE OPTION OF THE TRUST ................ 18
ARTICLE VII. .............................................................. 18
SECTION 1. COMPENSATION .......................................... 18
SECTION 2. INDEMNIFICATION AND LIMITATION OF LIABILITY ........... 19
SECTION 3. TRUSTEE'S GOOD FAITH ACTION, EXPERT ADVICE,
NO BOND-OR SURETY ..................................... 19
SECTION 4. INSURANCE ............................................. 20
i
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TABLE OF CONTENTS
PAGE
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ARTICLE VIII. ............................................................. 20
SECTION 1. LIABILITY OF THIRD PERSONS DEALING WITH TRUSTEES ...... 20
SECTION 2. TERMINATION OF TRUST OR SERIES ........................ 20
SECTION 3. MERGER AND CONSOLIDATION .............................. 21
SECTION 4. AMENDMENTS ............................................ 21
SECTION 5. FILING OF COPIES, REFERENCES, HEADINGS ................ 22
SECTION 6. APPLICABLE LAW ........................................ 22
SECTION 7. PROVISIONS IN CONFLICT WITH LAW OR REGULATIONS ........ 23
SECTION 8. BUSINESS TRUST ONLY ................................... 23
SECTION 9. USE OF THE IDENTIFYING WORDS .......................... 23
ii
<PAGE>
AMENDED AND RESTATED
AGREEMENT AND DECLARATION OF TRUST
OF
THE MONTGOMERY FUNDS II
WHEREAS, THIS AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST
is made and entered into as of the date set forth below by the Trustees named
hereunder for the purpose of forming a delaware business Trust in accordance
with the provisions hereinafter set forth,
NOW, THEREFORE, the Trustees hereby direct that a certificate of Trust
be filed with office of the secretary of state of the state of delaware and do
hereby declare that the Trustees will hold IN TRUST all cash, securities and
other assets which the Trust now possesses or may hereafter acquire from time to
time in any manner and manage and dispose of the same upon the following terms
and conditions for the pro rata benefit of the holders of Shares in this Trust.
ARTICLE I.
NAME AND DEFINITIONS
Section 1. Name. This Trust shall be known as THE MONTGOMERY FUNDS II,
and the Trustees shall conduct the business of the Trust under that name or any
other name as they may from time to time determine.
Section 2. Definitions. Whenever used herein, unless otherwise required
by the context or specifically provided:
(a) the "Trust" refers to the delaware business Trust
established under the delaware act by this agreement and Declaration of Trust,
as amended from time to time and the filing of the certificate of Trust in the
office of the secretary of state of the state of delaware;
(b) the "Trust Property" means any and all property, real or
personal, tangible or intangible, which is from time to time owned or held by or
for the account of the Trust, including without limitation the rights referenced
in Article VIIi, Section 9 hereof;
(c) "Trustees" refers to the persons who have signed this
agreement and Declaration of Trust, so long as they continue in office in
accordance with the terms hereof, and all other persons who may from time to
time be duly elected or appointed to serve on the Board of Trustees in
accordance with the provisions hereof, in
<PAGE>
each case so long as such person shall continue in office in accordance with the
terms of this Declaration of Trust, and reference herein to a Trustee or the
Trustees shall refer to such person or persons in their capacity as Trustees
hereunder;
(d) "Shares" means the Shares of beneficial interest into
which the beneficial interest in the Trust shall be divided from time to time
and includes fractions of Shares as well as whole Shares;
(e) "Shareholder" means a record owner of outstanding Shares;
(f) "Person" means and includes individuals, corporations,
partnerships, Trusts, associations, joint ventures, estates and other entities,
whether or not legal entities, and governments and agencies and political
subdivisions thereof, whether domestic or foreign;
(g) the "Investment Company Act" refers to the Investment
Company Act of 1940 and the rules and regulations thereunder, all as amended
from time to time;
(h) the terms "Commission" and "principal underwriter" shall
have the meanings given them in the Investment Company Act;
(i) "Declaration of Trust" shall mean this agreement and
Declaration of Trust, as amended or restated from time to time;
(j) "By-Laws" shall mean the By-Laws of the Trust, as amended
from time to time, which By-Laws are expressly incorporated herein by reference
as part of the governing instruments within the meaning of the delaware act;
(k) the term "Interested Person" has the meaning given it in
Section 2(a)(19) of the Investment Company Act;
(l) "Investment Adviser" or "Manager" means a party furnishing
services to the Trust pursuant to any contract described in Article IV, Section
7(a) hereof;
(m) "Series" refers to each Series of Shares established and
designated under or in accordance with the provisions of Article III hereof;
(n) "Certificate of Trust" means the certificate of Trust, as
amended or restated from time to time, filed-by the Trustees in the office of
the secretary of state of the state of delaware in accordance with the delaware
act;
2
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(o) "Class" means a Class of Shares of a Series of the Trust
established in accordance with the provisions of Article III hereof; and
(p) "Delaware Act" means the Delaware Business Trust Act 12
Del. C. ss. 3801 et seq., as amended from time to time.
ARTICLE II.
Purpose of Trust
The purpose of the Trust is to conduct, operate and carry on the
business of a management investment company registered under the Investment
Company Act through one or more Series investing primarily in securities, and to
carry on such other business as the Trustees may from time to time determine
pursuant to their authority under the Declaration of Trust.
Article III.
Shares
Section 1. Division of Beneficial Interest. The beneficial interest in
the Trust shall at all times be divided into an unlimited number of Shares, with
a par value of $ .01 per Share. The Trustees may authorize the division of
Shares into separate Series and the division of Series into separate Classes of
Shares. Subject to the further provisions of the Article III and any applicable
requirements of the Investment Company Act, 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, in their sole discretion, and without obtaining any authorization
or vote of the Shareholders of any Series or Class thereof., If only one or no
Series (or Classes) shall be established, the Shares shall have the rights and
preferences provided for herein and in Article III, Section 6 hereof to the
extent relevant and not otherwise provided for herein, and all references to
Series (and Classes thereof) shall be construed (as the context may require) to
refer to the Trust. All provisions herein relating to the Trust shall apply
equally to each Series of the Trust and each Class thereof, except as the
context otherwise requires.
Subject to the further provisions of this Article III and any
applicable requirements of the 1940 Act, the Trustees shall have full power and
authority, in their sole discretion, and without obtaining any authorization or
vote of the Shareholders of any Series or Class thereof, (i) to issue Shares
without limitation as to number (including fractional Shares) to such persons
and for such amount and type of consideration, subject to any restriction set
forth in the By-Laws, including cash or securities, at such time or times and on
such terms as the Trustees may deem appropriate, (ii) to establish and designate
and to change in any manner any Series or Class thereof and to fix such
preferences, voting powers, rights, duties and privileges and business purpose
of each
3
<PAGE>
Series or Class thereof as the Trustees may from time to time determine, which
preferences, voting powers, rights, duties and privileges may be senior or
subordinate to (or in the case of business purpose, different from) any existing
Series or Class thereof and may be limited to specified property or obligations
of the Trust or profits and losses associated with specified property or
obligations of the Trust, (iii) to divide or combine the Shares of any
particular Series or Class thereof into a greater or lesser number of Shares of
that Series or Class without thereby materially changing the proportionate
beneficial interest of the Shares of that Series or Class in the assets held
with respect to that Series or materially affecting the rights of Shares of any
other Series, (iv) to Classify or reClassify any issued Shares of any Series or
Class thereof into Shares of one or more Series or Classes thereof, and (v) to
take such other action with respect to the Shares as the Trustees may deem
desirable.
Subject to the provisions of Section 7 of this Article III, each Share
shall have voting rights as provided in Article V hereof, and holders of the
Shares of any Series or Class thereof shall be entitled to receive dividends
when, if and as declared with respect thereto in the manner provided in Article
VI, Section 1 hereof. Subject to the distinctions permitted among Classes of the
same Series as established by the Trustees, consistent with the requirements of
the Investment Company Act, each Share of a Series of the Trust shall represent
an equal beneficial interest in the net assets of such Series, and no Shares
shall have any priority or preference over any other Share of the same Series
with respect to dividends or distributions upon termination of the Trust or of
such Series made pursuant to Article VIII, Section 4 hereof. All dividends and
distributions shall be made ratably among all Shareholders of a particular Class
of a particular Series and, if no Classes, of a particular Series from the
assets held with respect to such Series according to the number of Shares of
such Class of such Series or of such Series held of record by such Shareholder
on the record date for any dividend or distribution or on the date of
termination, as the case may be. Upon redemption of the Shares of any Series,
the applicable Shareholder shall be paid solely out of the funds and property of
such Series of the Trust. All Shares issued hereunder, including, without
limitation, Shares issued in connection with a dividend in Shares or a split or
reverse split of Shares, shall be fully paid and non-assessable. Except as
otherwise provided by the Trustees, Shareholders shall have no preemptive or
other right to subscribe to any additional Shares or other securities issued by
the Trust or any Series. The Trustees may from time to time divide or combine
the Shares of any particular Series into a greater or lesser number of Shares of
that Series without thereby materially changing the proportionate beneficial
interest of the Shares of that Series in the assets held with respect to that
Series or materially affecting the rights of Shares of any other Series.
Section 2. Ownership of Shares. The ownership of Shares shall be
recorded on the books of the Trust or a transfer or similar agent for the Trust,
which books shall be maintained separately for the Shares of each Series (or
Class of each Series) of the Trust. No certificates certifying the ownership of
Shares shall be issued except as the Board of Trustees may otherwise determine
from time to time. The Trustees may make such rules as they consider appropriate
for the transfer of Shares of
4
<PAGE>
each Series (or Class of each Series) of the Trust and similar matters. The
record books of the Trust as kept by the Trust or any transfer or similar agent,
as the case may be, shall be conclusive as to the identity of the Shareholders
of each Series (or Class of each Series) of the Trust and as to the number of
Shares of each Series (or Class) of the Trust held from time to time by each.
Section 3. Transfer of Shares. Except as otherwise provided by the
Trustees, Shares shall be transferable on the books of the Trust only by the
record holder thereof or by his or her duly authorized agent upon delivery to
the Trustees or the Trust's transfer agent of a duly executed instrument of
transfer, together with a Share certificate if one is outstanding, and such
evidence of the genuineness of each such execution and authorization and of such
other matters as may be required by the Trustees. Upon such delivery, and
subject to any further requirements specified by the Trustees or contained in
the by- laws, the transfer shall be recorded on the books of the Trust. Until a
transfer is so recorded, the Shareholder of record of Shares shall be deemed to
be the holder of such Shares for all purposes hereunder and neither the Trustees
nor the Trust, nor any transfer agent or registrar or any officer, employee, or
agent of the Trust, shall be affected by any notice of a proposed transfer.
Section 4. Investments in the Trust. Investments may be accepted by the
Trust from such persons, at such times, on such terms, and for such
consideration as the Trustees from time to time may authorize.
Section 5. Status of Shares and Limitation of Personal Liability.
Shares shall be deemed to be personal property giving only the rights provided
in this instrument. 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. The death, incapacity, dissolution, termination, or
bankruptcy of a Shareholder during the existence of the Trust shall not operate
to terminate the Trust, nor entitle the representative of any deceased
Shareholder to an accounting or to take any action in court or elsewhere against
the Trust or the Trustees, but entitles such representative only to the rights
of said deceased Shareholder under this Trust. Ownership of Shares shall not
entitle the Shareholder to any title in or to the whole or any part of the Trust
Property or right to call for a partition or division of the same or for an
accounting, nor shall the ownership of Shares constitute the Shareholders as
partners. Neither the Trust nor the Trustees, nor any officer, employee or agent
of the Trust shall have any power to bind personally any Shareholder, nor,
except as specifically provided herein, to call upon any Shareholder for the
payment of any sum of money or assessment whatsoever other than such as the
Shareholder may at any time personally agree to pay.
Section 6. Power of Board of Trustees to Change Provisions Relating to
Shares. Notwithstanding any other provision of this Declaration of Trust and
without limiting the power of the Board of Trustees to amend the Declaration of
Trust as provided elsewhere herein, the Board of Trustees shall have the power
to amend this Declaration of Trust, at any time and from time to time, in such
manner as the Board
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of Trustees may determine in their sole discretion, without the need for
Shareholder action, so as to add to, delete, replace or otherwise modify any
provisions relating to the Shares contained in this Declaration of Trust,
provided that before adopting any such amendment without Shareholder approval
the Board of Trustees shall determine that it is consistent with the fair and
equitable treatment of all Shareholders or that Shareholder approval is not
otherwise required by the Investment Company Act or other applicable law. If
Shares have been issued, Shareholder approval shall be required to adopt any
amendments to this Declaration of Trust that would adversely affect to a
material degree the rights and preferences of the Shares of any Series (or class
of any Series) or to increase or decrease the par value of the Shares of any
Series (or class of any Series).
Subject to the foregoing paragraph, the Board of Trustees may amend the
Declaration of Trust to amend any of the provisions set forth in paragraphs (a)
through (i) of Section 7 of this Article III.
SECTION 7. Establishment and Designation of Series. The establishment
and designation of any Series (or class) of Shares of the Trust shall be
effective upon the resolution by a majority of the then Trustees, adopting a
resolution that sets forth such establishment and designation and the relative
rights and preferences of such Series (or class) of the Trust, whether directly
in such resolution or by reference to another document, including, without
limitation, any registration of Trust. Each such resolution shall be
incorporated herein by reference upon adoption.
Shares of each Series (or class) established pursuant to this Section
7, unless otherwise provided in the resolution establishing such Series, shall
have the following relative rights and preferences:
(a) Assets Held With Respect to a Particular SERIES. 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
from whatever source derived, including, without limitation, 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 be held with respect to that Series for all
purposes, subject only to the rights of creditors of such Series, and shall be
so recorded upon the books of account of the Trust. Such consideration, assets,
income, earnings, profits and proceeds thereof, from whatever source derived,
including, without limitation, 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, are herein
referred to as "assets held with respect to" that Series. In the event that
there are any assets, income, earnings, profits and proceeds thereof, funds or
payments which are not readily identifiable as assets held with respect to any
particular Series (collectively "general assets"), the Trustees shall allocate
such general assets to, between or among any one or more of the Series in such
manner and on such basis as the Trustees, in their sole discretion, deem fair
and equitable, and any general asset so
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allocated to a particular Series shall be held with respect to that Series. Each
such allocation by the Trustees shall be conclusive and binding upon the
Shareholders of all Series for all purposes. Separate and distinct records shall
be maintained for each Series and the assets held with respect to each Series
shall be held and accounted for separately from the assets held in respect to
all other-Series and the general assets of the Trust not allocated to such
Series.
(b) Liabilities Held With Respect to a Particular Series. The
assets of the Trust held with respect to each particular Series shall be charged
against the liabilities of the Trust held with respect to that Series and all
expenses, costs, charges and reserves attributable to that Series, and any
general liabilities of the Trust which are not readily identifiable as being
held with respect to any particular Series shall be allocated and charged by the
Trustees to and among any one or more of the Series in such manner and on such
basis as the Trustees in their sole discretion deem fair and equitable. The
liabilities, expenses, costs, charges, and reserves so charged to a Series are
herein referred to as "liabilities held with respect to" that Series. Each
allocation of liabilities, expenses, costs, charges and reserves by the Trustees
shall be conclusive and binding upon the holders of all Series for all purposes.
All persons who have extended credit which has been allocated to a particular
Series, or who have a claim or contract which has been allocated to any
particular Series, shall look exclusively to the assets of that particular
Series for payment of such credit, claim, or contract, and not against the
assets of the Trust generally or against the assets held with respect to any
other Series. Notice of this contractual limitation on the liability of each
Series shall be set forth in the certificate of Trust or in an amendment
thereto.
(c) Dividends, Distributions, Redemptions and Repurchases.
Notwithstanding any other provisions of this Declaration of Trust, including,
without limitation, Article VI, no dividend or distribution including, without
limitation, any distribution paid upon termination of the Trust or of any-Series
(or class) with respect to, nor any redemption or repurchase of, the Shares of
any Series (or class) shall be effected by the Trust other than from the assets
held with respect to such Series, nor, except as specifically provided in
Section 8 of this Article III, shall any Shareholder of any particular Series
otherwise have any right or claim against the assets held with respect to any
other Series except to the extent that such Shareholder has such a right or
claim hereunder as a Shareholder of such other Series. The Trustees shall have
full discretion, to the extent not inconsistent with the Investment Company Act,
to determine which items shall be treated as income and which items as capital-
and each such determination and allocation shall be conclusive and binding upon
the Shareholders.
(d) Voting. All Shares of the Trust Entitled to vote on a
matter shall vote separately by Series (and, if applicable, by class): that is,
the Shareholders of each Series (or class) shall have the right to approve or
disapprove matters affecting the Trust and each respective Series (or class) as
if the Series (or classes) were separate companies. There are, however, two
exceptions to voting by separate Series (or classes). First, if the Investment
Company Act requires all Shares of the Trust to be voted in the aggregate
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without differentiation between the separate Series (or classes), then all the
Trust's Shares shall be entitled to vote on a one-vote-per-Share basis. Second,
if any matter affects only the interests of some but not all Series (or
classes), then only the Shareholders of such affected Series (or classes) shall
be entitled to vote on the matter.
(e) Equality. All the Shares of each particular Series shall
represent an equal proportionate interest in the assets held with respect to
that Series (subject to the liabilities held with respect to that Series and
such rights and preferences as may have been established and designated with
respect to classes of Shares within such Series), and each Share of any
particular Series shall be equal to each other Share of that Series.
(f) Fractions. Any fractional Share of a Series shall carry
proportionately all the rights and obligations of a whole Share of that Series,
including rights with respect to voting, receipt of dividends and distributions,
redemption of Shares and termination of the Trust.
(g) Exchange Privilege. The Trustees shall have the authority
to provide that the holders of Shares of any Series shall have the right to
exchange said Shares for Shares of one or more other Series of Shares in
accordance with such requirements and procedures as may be established by the
Trustees.
(h) Combination of Series. The Trustees shall have the
authority, without the approval of the Shareholders of any Series unless
otherwise required by applicable law, to combine the assets and liabilities held
with respect to any two or more SERIES into assets and liabilities held with
respect to a single Series.
(i) Elimination of Series. At any time that there are no
Shares outstanding of any particular Series (or class) previously established
and designated, the Trustees may by resolution of a majority of the then
Trustees abolish that Series (or class) and rescind the establishment and
designation thereof.
Section 8. Indemnification of Shareholders. If any Shareholder or
former Shareholder shall be exposed to liability by reason of a claim or demand
relating to his or her being or having been a Shareholder, and not because of
his or her acts or omissions, the Shareholder or former Shareholder (or his or
her heirs, executors, administrators, or other legal representatives or in the
case of a corporation or other entity, its corporate or other general successor)
shall be entitled to be held harmless from and indemnified out of the assets of
the applicable Series of Shares of the Trust of which such person is or was a
Shareholder and from or in VIolation to which such liability arose against all
loss and expense arising from such claim or demand.
Article IV.
The Board of Trustees
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Section 1. Number, Election and Tenure. The number of Trustees
constituting the Board of Trustees shall be fixed from time to time by a written
instrument signed, or by resolution approved at a duly constituted meeting, by a
majority of the Board of Trustees, provided, however, that the number of
Trustees shall in no event be less than one (1) nor more than fifteen (15). The
Board of Trustees, by action of a majority of the then Trustees at a duly
constituted meeting, may fill vacancies in the Board of Trustees or remove
Trustees with or without cause. Each Trustee shall serve during the continued
lifetime of the Trust until he or she dies, resigns, is declared bankrupt or
incompetent by a court of appropriate jurisdiction, or is removed, or, if
sooner, until the next meeting of Shareholders called for the purpose of
electing Trustees and until the election and qualification of his or her
successor. Any Trustee may resign at any time by written instrument signed by
him or her and delivered to any officer of the Trust or to a meeting of the
Trustees. Such resignation shall be effective upon receipt unless specified to
be effective at some other time. Except to the extent expressly provided in a
written agreement with the Trust, no Trustee resigning and no Trustee removed
shall have any right to any compensation for any period following his or her
resignation or removal, or any right to damages on account of such removal. The
Shareholders may fix the number of Trustees and elect Trustees at any meeting of
Shareholders called by the Trustees for that purpose. Any Trustee may be removed
at any meeting of Shareholders by a vote of two-thirds of the outstanding Shares
of the Trust. A meeting of Shareholders for the purpose of electing or removing
one or more Trustees may be called (i) by the Trustees upon their own vote, or
(ii) upon the demand of Shareholders owning 10% or more of the Shares, of the
Trust in the aggregate.
Section 2. Effect of Death, Resignation, etc. of a Trustee. The death,
declination to serve, resignation, retirement, removal, or incapacity of one or
more Trustees, or all of them, shall not operate to annul the Trust or to revoke
any existing agency created pursuant to the terms of this Declaration of Trust.
Whenever a vacancy in the Board of Trustees shall occur, until such vacancy is
filled as provided in Article IV, Section 1, the Trustees in office, regardless
of their number, shall have all the powers granted to the Trustees and shall
discharge all the duties imposed upon the Trustees by this Declaration of Trust.
As conclusive evidence of such vacancy, a written instrument certifying the
existence of such vacancy may be executed by an officer of the Trust or by a
majority of the Board of Trustees. In the event of the death, declination,
resignation, retirement, removal, or incapacity of all the then Trustees within
a short period of time and without the opportunity for at least one Trustee
being able to appoint additional Trustees to fill vacancies, the Trust's
investment adviser(s) are empowered to appoint new Trustees subject to the
provisions of Section 16(a)-of the Investment Company Act.
Section 3. Powers. Subject to the provisions of this Declaration of
Trust, the business of the Trust shall be managed by the Board of Trustees, and
such Board shall have all powers necessary or convenient to carry out that
responsibility, including the power to engage in securities transactions of all
kinds on behalf of the Trust. Without limiting the foregoing, the Trustees may:
adopt By-Laws not inconsistent with this Declaration of Trust providing for the
regulation and management of the affairs
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of the Trust and may amend and repeal them to the extent that such By-Laws do
not reserve that right to the Shareholders; remove any Trustee with or without
cause at any time by written instrument signed by at least two-thirds of the
number of Trustees prior to such removal, specifying the date when such removal
shall become effective, and fill vacancies caused by enlargement of their number
or by the death, resignation or removal of a Trustee; fill vacancies in or
remove from their number, and may elect and remove such officers and appoint and
terminate such agents as they consider appropriate; appoint from their own
number and establish and terminate one or more committees consisting of one or
more Trustees, which may exercise the powers and authority of the Board of
Trustees to the extent that the Trustees determine; employ one or more
custodians of the assets of the Trust and may authorize such custodians to
employ subcustodians and to deposit all or any part of such assets in a system
or systems for the central handling of securities or with a federal reserve
bank; retain a transfer agent or a Shareholder servicing agent, or both; provide
for the issuance and distribution of Shares by the Trust directly or through one
or more principal underwriters or otherwise; redeem, repurchase and transfer
Shares pursuant to applicable law; set record dates for the determination of
Shareholders with respect to various matters; declare and pay dividends and
distributions to Shareholders of each Series from the assets of such Series;
and, in general, delegate such authority as they consider desirable to any
officer of the Trust, to any committee of the Trustees and to any agent or
employee of the Trust or to any such custodian, transfer or Shareholder
servicing agent, or principal underwriter. 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 of Trust, the
presumption shall be in favor of a grant of power to the Trustees. Unless
otherwise specified or required by law, any action by the Board of Trustees
shall be deemed effective if approved or taken by a majority of the Trustees
then in office.
Without limiting the foregoing, the Trust shall have power and
authority to cause the Trust (or to act on behalf of the Trust):
(a) to invest and reinvest cash, to hold cash uninvested, and
to subscribe for, invest in, reinvest in, purchase or otherwise acquire, own,
hold, pledge, sell, assign, transfer, exchange, distribute, write options on,
lend or otherwise deal in or dispose of contracts for the future acquisition or
delivery of fixed income or other securities, and securities of every nature and
kind, including, without limitation, all types of bonds, debentures, stocks,
negotiable or non-negotiable instruments, obligations, evidences of
indebtedness, certificates of deposit or indebtedness, commercial paper,
repurchase agreements, bankers' acceptances, and other securities of any kind,
issued, created, guaranteed, or sponsored by any and all persons, including,
without limitation, states, territories, and possessions of the united states
and the district of columbia and any political subdivision, agency, or
instrumentality thereof, any foreign government or any political subdivision of
the u.s. government or any foreign government, or any international
instrumentality, or by any bank-or savings institution, or by any corporation or
organization organized under the laws of the united states or of any state,
territory, or possession thereof, or by any corporation or organization
organized under any foreign
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law, or in "when issued" contracts for any such securities, to change the
investments of the assets of the Trust; and to exercise any and ail rights,
powers, and privileges of ownership or interest in respect of any and all such
investments of every kind and description, including, without limitation, the
right to consent and otherwise act with respect thereto, with power to designate
one or more persons, to exercise any of said rights, powers, and privileges in
respect of any of said instruments;
(b) To sell, exchange, lend, pledge, mortgage, hypothecate,
lease, or write options, including options on futures contracts, with respect to
or otherwise deal in any property rights relating to any or all of the assets of
the Trust or any Series;
(c) To vote or give assent, or exercise any rights of
ownership, with respect to stock or other securities or property; and to execute
and deliver proxies or powers of attorney to such person or persons as the
Trustees shall deem proper, granting to such person or persons such power and
discretion with relation to securities or property as the Trustees shall deem
proper;
(d) To exercise powers and right of subscription or otherwise
which in any manner arise out of ownership of securities;
(e) To hold any security or property in a form not indicating
any Trust, whether in bearer, unregistered or other negotiable form, or in its
own name or in the name of a custodian or subcustodian or a nominee or nominees
or otherwise;
(f) To consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation or issuer of any
security which is held in the Trust; to consent to any contract, lease,
mortgage, purchase or sale of property by such corporation or issuer; and to pay
calls or subscriptions with respect to any security held in the Trust;
(g) To join with other security holders in acting through a
committee, depositary, voting Trustee or otherwise, and in that connection to
deposit any security with, or transfer any security to, any such committee,
depositary or Trustee, and to delegate to them such power and authority with
relation to any security (whether or not so deposited or transferred) as the
Trustees shall deem proper, and to agree to pay, and to pay, such portion of the
expenses and compensation of such committee, depositary or Trustee as the
Trustees shall deem proper;
(h) To compromise, arbitrate or otherwise adjust claims in
favor of or against the Trust or any matter in controversy, including but not
limited to claims for taxes;
(i) To enter into joint ventures, general or limited
partnerships and any other combinations or associations;
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(j) To borrow funds or other property in the name of the Trust
exclusively for Trust purposes and in connection therewith issue notes or other
evidence of indebtedness; and to mortgage and pledge the Trust Property or any
part thereof to secure any or all of such indebtedness;
(k) To endorse or guarantee the payment of any notes or other
obligations of any person; to make contracts of guaranty or suretyship, or
otherwise assume liability for payment thereof and to mortgage and pledge the
Trust Property or any part thereof to secure any or all such obligations;
(l) To purchase and pay for entirely out of Trust
Property such insurance as the Trustees may deem necessary or appropriate for
the conduct of the business, including, without limitation, insurance policies
insuring the assets of the Trust or payment of distributions and principal on
its portfolio investments, and insurance policies insuring the Shareholders,
Trustees, officers, employees, agents, investment advisers, principal
underwriters, or independent contractors of the Trust, individually against all
claims and liabilities of every nature arising by reason of holding Shares,
holding, being or having held any such office or position, or by reason of any
action alleged to have been taken or omitted by any such person as Trustee,
officer, employee, agent, investment adviser, principal underwriter, or
independent contractor, including any action taken or omitted that may be
determined to constitute negligence, whether or not the Trust would have the
power to indemnify such person against liability;
(m) To adopt, establish and carry out pension, profit-
sharing, Share bonus, Share purchase, savings, thrift and other retirement,
incentive and benefit plans, Trusts and provisions, including the purchasing of
life insurance and annuity contracts as a means of providing such retirement and
other benefits, for any or all of the Trustees, officers, employees and agents
of the Trust;
(n) To operate as and carry out the business of an investment
company, and exercise all the powers necessary or appropriate to the conduct of
such operations;
(o) To enter into contracts of any kind and description;
(p) To employ one or more banks, Trust companies or companies
that are members of a national securities exchange or such other entities as the
commission may permit as custodians of any assets of the Trust subject to any
conditions set forth in this Declaration or Trust or in the By-Laws;
(q) To interpret the investment policies, practices, or
limitations of any Series or class; and
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(R) Subject to the Investment Company Act, to engage in any
other lawful act or activity in which a business Trust organized under the
delaware act may engage.
The Trust shall not be limited to investing in obligations maturing
before the possible termination of the Trust or one or more of its Series. The
Trust shall not in any way be bound or limited by any present or future law or
custom in regard to investment by fiduciaries. The Trust shall not be required
to obtain any court order to deal with any assets of the Trust or take any other
action hereunder.
Section 4. Payment of Expenses by the Trust. The Trustees are
authorized to pay or cause to be paid out of the principal or income of
thPayment of Expenses by Shae Trust, or partly out of the principal and partly
out of income, as they deem fair, all expenses, fees, charges, taxes and
liabilities incurred or arising in connection with the Trust, or in connection
with the management thereof, including, but not limited to, the Trustees'
compensation and such expenses and charges for the services of the Trust's
officers, employees, investment adviser or manager, principal underwriter,
auditors, counsel, custodian, transfer agent, Shareholder servicing agent, and
such other agents or independent contractors and such other expenses and charges
as the Trustees may deem necessary or proper to incur, which expenses, fees,
charges, taxes and liabilities shall be allocated in accordance with Article
III, Section 7 hereof.
Section 5. Payment of Expenses by Shareholders. The Trustees shall have
the power, as frequently as they may determine, to cause each Shareholder, or
each Shareholder of any particular Series, to pay directly, in advance or
arrears, for charges of the Trust's custodian or transfer, Shareholder servicing
or similar agent, an amount fixed from time to time by the Trustees, by setting
off such charges due from such Shareholder from declared but unpaid dividends
owed such Shareholder and/or by reducing the number of Shares in the account of
such Shareholder by that number of full and/or fractional Shares which
represents the outstanding amount of such charges due from such Shareholder.
Section 6. Ownership of Assets of the Trust. Title to all of the assets
of the Trust shall at all times be considered as vested in the Trust, 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. The right, title and interest of the Trustees in the
Trust Property shall vest automatically in each person who may hereafter become
a Trustee. Upon the resignation, removal or death of a Trustee, he or she shall
automatically cease to have any right, title or interest in any of the Trust
Property, 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 has
been executed and delivered.
Section 7. Service Contracts.
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(a) subject to such requirements and restrictions as may be
set forth under federal and/or state law in the By-Laws, including, without
limitation, the requirements of the Investment Company Act, the Trustees may, at
any time and from time to time, contract for exclusive or nonexclusive advisory,
management and/or administrative services for the Trust or for any Series (or
class thereof) with any corporation, Trust, association or other organization;
and any such contract may contain such other terms as the Trustees may
determine, including without limitation, authority for the investment adviser or
administrator to delegate certain or all of its duties under such contract to
qualified investment advisers and administrators and to determine from time to
time without prior consultation with the Trustees what investments shall be
purchased, held, sold or exchanged and what portion, if any, of the assets of
the Trust shall be held uninvested and to make changes in the Trust's
investments, or such other activities as may specifically be delegated to such
party.
(b) the Trustees may also, at any time and from time to time,
contract with any corporation, Trust, association or other organization,
appointing it exclusive or nonexclusive distributor or principal underwriter for
the Shares of one or more of the Series (or classes) or other securities to be
issued by the Trust. Every such contract shall comply with such requirements and
restrictions as may be set forth under federal and/or state law and in the
By-Laws, including, without limitation the requirements of Section 15 of the
Investment Company Act; and any such contract may contain such other terms as
the Trustees may determine.
(c) the Trustees are also empowered, at any time and from time
to time, to contract with any corporations, Trusts, associations or other
organizations, appointing it or them custodian, transfer agent and/or
Shareholder servicing agent for the Trust or one or more of its Series. Every
such contract shall comply with such requirements and restrictions as may be set
forth under federal and/or state law and in the By-Laws or stipulated by
resolution of the Trustees.
(d) subject to applicable law, the Trustees are further
empowered, at any time and from time to time, to contract with any entity to
provide such other services to the Trust or one or more of the Series, as the
Trustees determine to be consistent with the best interests of the Trust and the
applicable Series.
(e) the fact that:
(i) any of the Shareholders, Trustees, or officers of
the Trust is a Shareholder, director, officer, partner, Trustee, employee,
investment adviser, manager, principal underwriter, distributor, or affiliate or
agent of or for any corporation, Trust, association, or other organization, or
for any parent or affiliate of any organization with which an advisory,
management or administration contract, or principal underwriter's or
distributor's contract, or transfer, Shareholder servicing or other type of
service contract may
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have been or may hereafter be made, or that any such organization, or any parent
or affiliate thereof, is a Shareholder or has an interest in the Trust, or that
(ii) any corporation, Trust, association or other
organization with which an advisory, management or administration contract or
principal underwriter's or distributor's contract, or transfer, Shareholder
servicing or other type of service contract may have been or may hereafter be
made also has an advisory, management or administration contract, or principal
underwriter's or distributor's contract, or transfer, Shareholder servicing or
other service contract with one or more other 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,
provided approval of each such contract is made pursuant to the requirements of
the Investment Company Act.
Section 8. Trustees and Officers-as Shareholders. Any Trustee, officer
or agent of the Trust may acquire, own and dispose of Shares to the same extent
as if he were not a Trustee, officer or agent; and the Trustees may issue and
sell and cause to be issued and sold Shares to, and redeem such Shares from, any
such person or any firm or company in which such person is interested, subject
only to the general limitations contained herein or in the By-Laws relating to
the sale and redemption of such Shares.
Article V.
Shareholders' Voting Powers and Meetings.
Section 1. Voting Powers. Subject to the provisions of Article III,
Section 7(d), the Shareholders shall have power to vote only (i) for the
election or removal of Trustees as provided in Article IV, Section 1 hereof, and
(ii) with respect to such additional matters relating to the Trust as may be
required by this Declaration of Trust, the By-Laws or any registration of the
Trust with the commission (or any successor agency) or any state, or as the
Trustees may consider necessary or desirable. As appropriate, voting may be by
Series (or class). Each whole Share shall be entitled to one vote multiplied by
the per-Share net asset value on the record date for the vote as to any matter
on which it is entitled to vote and each fractional Share shall be entitled to a
proportionate fractional vote. There shall be no cumulative voting in the
election of Trustees. Shares may be voted in person or by proxy. A proxy with
respect to Shares held in the name of two or more persons shall be valid if
executed by any one of them unless at or prior to exercise of the proxy the
Trust receives a specific written notice to the contrary from any one of them. A
proxy purporting to be executed by or on behalf of
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a Shareholder shall be deemed valid unless challenged at or prior to its
exercise and the burden of proving invalidity shall rest on the challenger.
Section 2. Voting Power and Meetings. Meetings of the Shareholders may
be called by the Trustees for the purpose of electing Trustees as provided in
Article IV, Section 1 and for such other purposes as may be prescribed by law,
by this Declaration of Trust or by the By-Laws. Meetings of the Shareholders may
also be called by the Trustees from time to time for the purpose of taking
action upon any other matter deemed by the Trustees to be necessary or
desirable. A meeting of Shareholders may be held at any place designated by the
Trustees. Written notice of any meeting of Shareholders shall be given or caused
to be given by the Trustees by mailing such notice at least seven (7) days
before such meeting, postage prepaid, stating the time and place of the meeting,
to each Shareholder at the Shareholder's address as it appears on the records of
the Trust. Whenever notice of a meeting is required to be given to a Shareholder
under this Declaration of Trust or the By-Laws, a written waiver thereof,
executed before or after the meeting by such Shareholder or his or her attorney
thereunto authorized and filed with the records of the meeting, shall be deemed
equivalent to such notice.
Section 3. Quorum and Required Vote. Except when a larger quorum is
required by applicable law, by the By-Laws or by this Declaration of Trust,
forty percent (40%) of the Shares entitled to vote shall constitute a quorum at
a Shareholders' meeting. When any one or more Series (or classes) is to vote as
a single class separate from any other Shares, forty percent (40%) of the Shares
of each such Series (or classes) entitled to vote shall constitute a quorum at a
Shareholder's meeting of that Series (or class), except when a larger quorum is
required by applicable law. Any meeting of Shareholders may be adjourned from
time to time by a majority of the votes property cast upon the question of
adjourning a meeting to another date and time, whether or not a quorum is
present, and the meeting may be held as adjourned within a reasonable time after
the date set for the original meeting without further notice. Subject to the
provisions of Article III, Section 7(d), when a quorum is present at any
meeting, a majority of the Shares voted shall decide any questions and a
plurality of the Shares voted shall elect a Trustee, except when a larger vote
is required by any provision of this Declaration of Trust or the By-Laws or by
applicable law.
Section 4. Action by Written Consent. Any action taken by Shareholders
may be taken without a meeting if Shareholders holding a majority of the Shares
entitled to vote on the matter (or such larger proportion thereof as shall be
required by any express provision of this Declaration of Trust or by the By-Laws
or by applicable law) and holding a majority (or such larger proportion as
aforesaid) of the Shares of any Series (or class) entitled to vote separately on
the matter consent to the action in writing and such written consents are filed
with the records of the meetings of Shareholders. Such consent shall be treated
for all purposes as a vote taken at a meeting of Shareholders.
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Section 5. Record Dates. For the purpose of determining the
Shareholders of any Series (or class) who are entitled to vote or act at any
meeting or any adjournment thereof, the Trustees may from time to time fix a
time, which shall be not more than ninety (90) days before the date of any
meeting of Shareholders, as the record date for determining the Shareholders of
such Series (or class) having the right to notice of and to vote at such meeting
and any adjournment thereof, and in such case only Shareholders of record on
such record date shall have such right, notwithstanding any transfer of Shares
on the books of the Trust after the record date. For the purpose of determining
the Shareholders of any Series (or class) who are entitled to receive payment of
any dividend or of any other distribution, the Trustees may from time to time
fix a date, which shall be before the date for the payment of such dividend or
such other payment, as the record date for determining the Shareholders of such
Series (or class) having the right to receive such dividend or distribution.
Without fixing a record date the Trustees may for voting and/or distribution
purposes close the register or transfer books for one or more Series (or
classes) for all or any part of the period between a record date and a meeting
of Shareholders or the payment of a distribution. Nothing in this Section shall
be construed as precluding the Trustees from setting different record dates for
different Series (or classes).
Section 6. Additional-Provisions. The By-Laws may include further
provisions for Shareholders' votes and meetings and related matters.
Article VI.
Net Asset Value, Distributions and Redemptions
Section 1. Determination of Net Asset Value, Net Income and
Distributions. Subject to Article III, Section 7 hereof, the Trustees, in their
absolute discretion, may prescribe and shall set forth in the By-Laws or in a
duly adopted vote of the Trustees such bases and time for determining the
per-Share net asset value of the Shares of any Series or net income attributable
to the Shares of any Series, or the Declaration and payment of dividends and
distributions on the Shares of any Series, as they may deem necessary or
desirable.
Section 2. Redemptions and Repurchases. The Trust shall purchase such
Shares as are offered by any Shareholder for redemption, upon the presentation
of a proper instrument of transfer together with a request directed to the Trust
or a person designated by the Trust that the Trust purchase such Shares or in
accordance with such other procedures for redemption as the Trustees may from
time to time authorize; and the Trust will pay therefor the net asset value
thereof, in accordance with the By-Laws and applicable law. Unless extraordinary
circumstances exist, payment for said Shares shall be made by the Trust to the
Shareholder within seven days after the date on which the request is made in
proper form. The obligation set forth in this Section 2 is subject to the
provision that in the event that any time the new york stock exchange (the
"exchange") is closed for other than weekends or holidays, or if permitted by
the rules of the commission
17
<PAGE>
during periods when trading on the exchange is restricted or during any
emergency which makes it impracticable for the Trust to dispose of the
investments of the applicable Series or to determine fairly the value of the net
assets held with respect to such Series or during any other period permitted by
order of the commission for the protection of investors, such obligations may be
suspended or postponed by the Trustees. In the case of a suspension of the right
of redemption as provided therein, a Shareholder may either withdraw the request
for redemption or receive payment based on the net asset value per Share next
determined after the termination of such suspension.
The redemption price may in any case or cases be paid wholly or partly
in kind if the Trustees determine that such payment is advisable in the interest
of the remaining Shareholders of the Series for which the Shares are being
redeemed. Subject to the foregoing, the fair value, selection and quantity of
securities or other property so paid or delivered as all or part of the
redemption price may be determined by or under authority of the Trustees. In no
case shall the Trust be liable for any delay of any corporation or other person
in transferring securities selected for delivery as all or part of any payment
in kind.
Section 3. Redemptions at the Option of the Trust. The Trust shall have
the right, at its option and at any time, to redeem Shares of any Shareholder at
the net asset-value thereof as described in Section 1 of this Article VI: (i) if
at such time such Shareholder owns Shares of any Series having an aggregate net
asset value of less than an amount determined from time to time by the Trustees
prior to the acquisition of said Shares; or (ii) to the extent that such
Shareholder owns Shares of a particular Series equal to or in excess of a
percentage of the outstanding Shares of that Series determined from time to time
by the Trustees; or (iii) to the extent that such Shareholder owns Shares-equal
to or in excess of a percentage, determined from time to time by the Trustees,
of the outstanding Shares of the Trust or of any Series.
Article VII.
Compensation and Limitation of Liability of Trustees
Section 1. Compensation. The Trustees as such shall be entitled to
reasonable compensation from the Trust, and they may fix the amount of such
compensation. Nothing herein shall in any way prevent the employment of any
Trustee for advisory, management, legal, accounting, investment banking or other
services and payment for the same by the Trust.
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Section 2. Indemnification and Limitation of Liability. The Trustees
shall not be responsible or liable in any event for any neglect or wrong-doing
of any officer, agent, employee, investment adviser or principal underwriter of
the Trust, nor shall any Trustee be responsible for the act or omission of any
other Trustee, and the Trust out of its assets shall indemnify and hold harmless
each and every Trustee, or each person who is serving or has served at the
Trust's request as a director, officer, Trustee, employee, or agent of another
organization in which the Trust has any interest as a Shareholder, creditor, or
otherwise to the extent and in the manner provided in the ByLaws, from and
against any and all claims and demands whatsoever arising out of or related to
each Trustee's performance of his or her duties as a Trustee of the Trust;
provided that nothing herein contained shall indemnify,- hold harmless or
protect any Trustee, from or against any liability to the Trust or any
Shareholder to which he or she would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his or her office. All persons extending credit to,
contracting with or having any claim against the Trust of the Trustees shall
look only to the assets of the appropriate Series of the Trust for payment under
such credit, contract, or claim; and neither the Trustees nor the Shareholders,
nor any of the Trust's officers, employees or agents, whether past, present, or
future, shall be personally liable therefor.
Every note, bond, contract, instrument, certificate or undertaking and
every other act or thing whatsoever issued, executed or done by or on behalf of
the Trust or the Trustees or any of them in connection with the Trust shall be
conclusively deemed to have been issued, executed or done only in or with
respect to their or his or her capacity as Trustees or Trustee, and such
Trustees or Trustee shall not be personally liable thereon. At the Trustees'
discretion, any note, bond, contract, instrument, certificate or undertaking
made or issued by the Trustees or by any officer or officers may give notice
that the certificate of Trust is on file in the office of the secretary of state
of the state of delaware and that a limitation on liability of Series exists and
such note, bond, contract, instrument, certificate or undertaking may, if the
Trustees so determine, recite that the same was executed or made on behalf of
the Trust by a Trustee or Trustees in such capacity and not individually and
that the obligations of such instrument are not binding upon any of them or the
Shareholders individually but are binding only on the assets and property of the
Trust or a Series thereof, and may contain such further recital as such person
or persons may deem appropriate. The omission of any such notice or recital
shall in no way operate to bind any Trustees, officer, or Shareholders
individually.
Section 3. Trustee's Good Faith Action, Expert Advice, No Bondor
Surety. The exercise by the Trustees of their powers and discretion hereunder
shall be binding upon everyone interested. A Trustee shall be liable to the
Trust and to any Shareholder solely for his or her own willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of the office of Trustee, and shall not be liable for errors of judgment
or mistakes of fact or law. The Trustees may take advice of counsel or other
experts with respect to the meaning and operation of this Declaration of Trust,
and shall be under no liability for any act or omission in accordance
19
<PAGE>
with such advice nor for failing to follow such advice. The Trustees shall not
be required to give any bond as such, nor any surety if a bond is required.
Section 4. Insurance. The Trustees shall be entitled and empowered to
the fullest extent permitted by law to purchase with Trust assets insurance for
liability and for all expenses reasonably incurred or paid or expected to be
paid by a Trustee or officer in connection with any claim, action, suit or
proceeding in which he or she becomes involved by VIrtue of his or her capacity
or former capacity with the Trust.
Article VIII.
Miscellaneous
Section 1. Liability of Third Persons Dealing with Trustees. No person
dealing with the Trustees shall be bound to make any inquiry concerning the
validity of any transaction made or to be made by the Trustees or to see to the
application of any payments made or property transferred to the Trust or upon
its order.
Section 2. Termination of Trust or Series. Unless terminated as
provided herein, the Trust shall continue without limitation of time. The Trust
may be terminated at any time by vote of a majority of the Shares of each Series
entitled to vote, voting separately by Series, or by the Trustees by written
notice to the Shareholders. Any Series or class thereof may be terminated at any
time by vote of a majority of the Shares of that Series or class entitled to
vote or by the Trustees by written notice to the Shareholders of that Series or
class.
Upon termination of the Trust (or any one or more Series or any class
thereof, as the case may be) by the requisite Shareholder vote or action by the
Trustees, after paying or otherwise providing for all charges, taxes, expenses
and liabilities held, severally, with respect to each Series (or the applicable
Series, as the case may be), whether due or accrued or anticipated as may be
determined by the Trustees, the Trust shall, in accordance with such-procedures
as the Trustees consider appropriate, reduce the remaining assets held,
severally, with respect to each Series (or the applicable Series or any class
thereof if any Series or class remains, as the case may be), to distributable
form in cash or Shares or other securities, or any combination thereof, and
distribute the proceeds held with respect to each Series or class (or the
applicable Series, as the case may be), to the Shareholders of that Series, as a
Series or class, ratably according to the number of Shares of that Series or
class held by the several Shareholders on the date of termination. Thereupon,
the Trust or any affected Series or class shall terminate and the Trustees and
the Trust shall be discharged of any and all further liabilities and duties
relating thereto or arising therefrom, and the right, title, and interest of all
parties with respect to the Trust or such Series or Class shall be canceled and
discharged.
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<PAGE>
Upon termination of the Trust, following completion of winding up of
its business, the Trustees shall cause a certificate of cancellation of the
Trust's certificate of Trust to be filed in accordance with the delaware act,
which certificate of cancellation may be signed by any one Trustee.
Section 3. Merger and Consolidation. Notwithstanding anything else
herein, the Trustees may cause (i) the Trust or one or more of its Series to the
extent consistent with applicable law to be merged into or consolidated with
another Trust or company (including Trusts, partnerships, associations,
corporations or other business entities created by the Trustees to accomplish
such merger or consolidation) so long as the surviving or resulting entity is a
management investment company under the Investment Company Act, or is a Series
thereof, that will succeed to or assume the Trust's registration under the
Investment Company Act and that is formed, organized, or existing under the laws
of the united states or of a state, commonwealth, possession or colony of the
united states, (ii) the Shares of the Trust or any Series to be converted into
beneficial interests in another business Trust (or Series thereof) created
pursuant to this Section 3 of Article VIIi, (iii) the Shares to be exchanged
under or pursuant to any state or federal statute to the extent permitted by
law, or (iv) cause the Trust to incorporate under the laws of delaware or any
other state or jurisdiction. Such merger or consolidation, Share conversion or
Share exchange must be authorized by vote of a majority of the outstanding
Shares of the Trust, as a whole, or any affected Series, as may be applicable;
provided that in all respects not governed by statute or applicable law, the
Trustees shall have the power to prescribe the procedure necessary or
appropriate to accomplish a sale of assets, merger or consolidation including
the power to create one or more separate business Trusts to which all or any
part of the assets, liabilities, profits or losses of the Trust or any Series or
class thereof may be transferred and to provide for the conversion of Shares of
the Trust or any Series or class thereof into beneficial interests in such
separate business Trust or Trusts (or Series or classes thereof).
Pursuant to and in accordance with the provisions of Section 3815(f) of
the delaware act, and notwithstanding anything to the contrary contained in this
Declaration of Trust, an agreement of merger or consolidation approved by the
Trustees in accordance with this Section 3 may (i) effect any amendment to the
governing instrument of the Trust or (ii) effect the adoption of a new governing
instrument of the Trust if the Trust is the surviving or resulting Trust in the
merger or consolidation.
Section 4. Amendments. Except as specifically provided in this Section,
this Declaration of Trust may be restated and/or amended or otherwise
supplemented at any time by an instrument in writing signed by a majority of the
then Trustees and, if required, by approval of such amendment by Shareholders in
accordance with Article v, Section 3 hereof. Any such restatement and/or
amendment hereto shall be effective immediately upon execution and approval. The
certificate of Trust of the Trust may be restated and/or amended by a similar
procedure (however, only one Trustee need sign an amendment to the certificate
of Trust, and other Trustees need not approve such amendment in writing when it
directly reflects provisions in, or approved amendments to,
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<PAGE>
the Declaration of Trust), and any such restatement and/or amendment shall be
effective immediately upon filing with the office of the secretary of state of
the state of delaware or upon such future date as may be stated therein.
Section 5. Filing of Copies, References, Headings. The original or a
copy of this instrument and of each restatement and/or amendment hereto shall be
kept at the office of the Trust where it may be inspected by any Shareholder.
Anyone dealing with the Trust may rely on a certificate by an officer of the
Trust as to whether or not any such restatements and/or amendments have been
made and as to any matters in connection with the Trust hereunder; and, with the
same effect as if it were the original, may rely on a copy certified by an
officer of the Trust to be a copy of this instrument or of any such restatements
and/or amendments. In this instrument and in any such restatements and/or
amendment, references to this instrument, and all expressions like "herein,"
"hereof" and "hereunder," shall be deemed to refer to this instrument as amended
or affected by any such restatements and/or amendments. Headings are placed
herein for convenience of reference only and shall not be taken as a part hereof
or control or affect the meaning, construction or effect of this instrument.
Whenever the singular number is used herein, the same shall include the plural;
and the neuter, masculine and feminine genders shall include each other, as
applicable. This instrument may be executed in any number of counterparts each
of which shall be deemed an original.
Section 6. Applicable Law. This agreement and Declaration of Trust is
created under and is to be governed by and construed and administered according
to the laws of the state of delaware and the delaware act. The Trust shall be a
delaware business Trust pursuant to such act, and without limiting the
provisions hereof, the Trust may exercise all powers which are ordinarily
exercised by such a business Trust, and the absence of a specific reference
herein to any such power, privilege, or action shall not imply that the Trust
may not exercise such power or privilege or take such actions.
Notwithstanding the first sentence of Section 6 of this Article VIII,
there shall not be applicable to the Trust, the Trustees, or this Declaration of
Trust either the provisions of Section 3540 of Title 12 of the Delaware Code or
any provisions of the laws (statutory or common) of the state of Delaware (other
than the Delaware Act) pertaining to Trusts that relate to or regulate; (i) the
filing with any court or governmental body or agency of Trustee accounts or
schedules of Trustee fees and charges, (ii) affirmative requirements to post
bonds for Trustees, officers, agents, or employees of a Trust, (iii) the
necessity for obtaining a court or other governmental approval concerning the
acquisition, holding or disposition of real or personal property, (iv) fees or
other sums applicable to Trustees, officers, agents or employees of a Trust, (v)
the allocation of receipts and expenditures to income or principal, (vi)
restrictions or limitations on the permissible nature, amount, or concentration
of Trust investments or requirements relating to the titling, storage, or other
manner of holding of Trust assets, or (vii) the establishment of fiduciary or
other standards or responsibilities or limitations on the acts or powers or
liabilities or authorities and powers of Trustees that are inconsistent with the
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limitations or liabilities or authorities and powers of the Trustees set forth
or referenced in this Declaration of Trust.
Section 7. Provisions in Conflict with Law or Regulations.
(a) The provisions of the Declaration of Trust are severable,
and if the Trustees shall determine, with the advice of counsel, that any of
such provisions is in conflict with the Investment Company 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 the Declaration of Trust; provided, however, that
such determination shall not affect any of the remaining provisions of the
Declaration of Trust or render invalid or improper any action taken or omitted
prior to such determination.
(b) If any provision of the Declaration of Trust shall be held
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision in such jurisdiction and
shall not in any manner affect such provision in any other jurisdiction or any
other provision of the Declaration of Trust in any jurisdiction.
Section 8. Business Trust Only. It is the intention of the Trustees to
create a business Trust pursuant to the delaware act and thereby to create only
the relationship of Trustee and beneficial owners within the meaning of such act
between the Trustees and each Shareholder. 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 business Trust pursuant to the delaware act. Nothing in this Declaration of
Trust shall be construed to make the Shareholders, either by themselves or with
the Trustees, partners or members of a joint stock association.
Section 9. Use of the Identifying Words "Montgomery" and "the
Montgomery Funds II." The identifying words "Montgomery" and "the Montgomery
Funds III" and all rights to the use of such identifying-words belong to
Montgomery Asset Management, L.P., the proposed investment adviser of the
Trust's Shares. Montgomery Asset Management, L.P. has licensed the Trust to use
the identifying words "the Montgomery Funds III, in the Trust's name and to use
the identifying word "Montgomery" in the name of any Series of the Trust. In the
event that Montgomery Asset Management, L.P. or an affiliate of Montgomery asset
management, l.p. is not appointed or ceases to be the investment adviser of the
Trust, the non-exclusive license may be revoked by Montgomery Asset Management,
L.P., and the Trust and any Series thereof shall respectively cease using the
identifying words "The Montgomery Funds III" and "Montgomery," unless otherwise
consented to by Montgomery Asset Management, L.P. or any successor to Montgomery
Asset Management, L.P.'s interest.
[remainder of page intentionally left blank]
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In witness whereof, the Trustees named below do hereby make and enter
into this agreement and Declaration of Trust as of this 16th day of August,
1994.
/s/ Andrew Cox
- --------------------------------
Andrew Cox
750 VIne Street
Denver, Colorado 80206
/s/ R. Stephen Doyle
- --------------------------------
R. Stephen Doyle
600 Montgomery Street
San Francisco, California 94111
/s/ John A. Farnsworth
- --------------------------------
John A. Farnsworth
23-F Main Street
Tiburon, California 94920
/s/ Cecilia Herbert
- --------------------------------
Cecilia Herbert
2636 Vallejo Street
San Francisco, California 94123
The principal place of business of the Trust is 600 Montgomery Street, San
Francisco, California 94111.
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Item 23 (b)
Amended and Restated
By-Laws
- --------------------------------------------------------------------------------
<PAGE>
AMENDED AND RESTATED BY-LAWS
for the regulation, except as
otherwise provided by statute or
the Agreement and Declaration of Trust of
THE MONTGOMERY FUNDS II
A DELAWARE BUSINESS TRUST
(formerly, "Montgomery Investment Trust")
(as of August 16, 1994)
<PAGE>
Table of Contents
-----------------
ARTICLE I. OFFICES 1
SECTION 1. PRINCIPAL OFFICE 1
SECTION 2. DELAWARE OFFICE 1
SECTION 3. OTHER OFFICES 1
ARTICLE II. MEETINGS OF SHAREHOLDERS 1
SECTION 1. PLACE OF MEETINGS 1
SECTION 2. CALL OF MEETING 1
SECTION 3. NOTICE OF SHAREHOLDERS' MEETING 1
SECTION 4. MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE 2
SECTION 5. ADJOURNED MEETING; NOTICE 2
SECTION 6. VOTING 2
SECTION 7. WAIVER OF NOTICE BY CONSENT OF ABSENT SHAREHOLDERS 3
SECTION 8. SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING 3
SECTION 9. RECORD DATE FOR SHAREHOLDER NOTICE, VOTING AND GIVING CONSENTS 4
SECTION 10. PROXIES 4
SECTION 11. INSPECTORS OF ELECTION 5
ARTICLE III. TRUSTEES 5
SECTION 1. POWERS 5
SECTION 2. NUMBER OF TRUSTEES 6
SECTION 3. VACANCIES 6
SECTION 4. PLACE OF MEETINGS AND MEETINGS BY TELEPHONE 6
SECTION 5. REGULAR MEETINGS 6
SECTION 6. SPECIAL MEETINGS 6
SECTION 7. QUORUM 7
SECTION 8. WAIVER OF NOTICE 7
SECTION 9. ADJOURNMENT 7
SECTION 10. NOTICE OF ADJOURNMENT 7
SECTION 11. ACTION WITHOUT A MEETING 7
SECTION 12. FEES AND COMPENSATION OF TRUSTEES 7
SECTION 13. DELEGATION OF POWER TO OTHER TRUSTEES 8
ARTICLE IV. COMMITTEES 8
SECTION 1. COMMITTEES OF TRUSTEES 8
SECTION 2. MEETINGS AND ACTION OF COMMITTEES 9
ARTICLE V. OFFICERS 9
SECTION 1. OFFICERS 9
SECTION 2. ELECTION OF OFFICERS 9
SECTION 3. SUBORDINATE OFFICERS 9
SECTION 4. REMOVAL AND DESIGNATION OF OFFICERS 9
SECTION 5. VACANCIES IN OFFICES 10
SECTION 6. CHAIRMAN OF THE BOARD 10
SECTION 7. PRESIDENT 10
SECTION 8. VICE PRESIDENTS 10
SECTION 9. SECRETARY 11
SECTION 10. TREASURER 11
ARTICLE VI. INDEMNIFICATION OF TRUSTEES OFFICERS 11
SECTION 1. AGENTS, PROCEEDINGS AND EXPENSES 11
SECTION 2. ACTIONS OTHER THAN BY TRUST 12
SECTION 3. ACTIONS BY THE TRUST 12
SECTION 4. EXCLUSION OF INDEMNIFICATION 12
SECTION 5. SUCCESSFUL DEFENSE BY AGENT 13
SECTION 6. REQUIRED APPROVAL 13
SECTION 7. ADVANCE OF EXPENSES 13
SECTION 8. OTHER CONTRACTUAL RIGHTS 14
SECTION 9. LIMITATIONS 14
SECTION 10. INSURANCE 14
SECTION 11. FIDUCIARIES OF EMPLOYEE BENEFIT PLAN 14
ARTICLE VII. RECORDS AND REPORTS 15
SECTION 1. MAINTENANCE AND INSPECTION OF SHARE REGISTER 15
SECTION 2. MAINTENANCE AND INSPECTION OF BY-LAWS 15
SECTION 3. MAINTENANCE AND INSPECTION OF-OTHER RECORDS 15
SECTION 4. INSPECTION BY TRUSTEES 15
SECTION 5. FINANCIAL STATEMENTS 15
ARTICLE VIII. GENERAL MATTERS 16
SECTION 1. CHECKS, DRAFTS, EVIDENCE OF INDEBTEDNESS 16
SECTION 2. CONTRACTS AND INSTRUMENTS; HOW EXECUTED 16
SECTION 3. CERTIFICATES FOR SHARES 16
SECTION 4. LOST CERTIFICATES 16
SECTION 5. REPRESENTATION OF SHARES OF OTHER ENTITIES HELD BY TRUST 17
SECTION 6. FISCAL YEAR 17
ARTICLE IX. AMENDMENTS 17
SECTION 1. AMENDMENT BY SHAREHOLDERS 17
SECTION 2. AMENDEMNT BY TRUSTEES 17
SECTION 3. INCORPORATION BY REFERENCE INTO AGREEMENTS AND DECLARATION
OF TRUST OF THE TRUST 17
<PAGE>
AMENDED AND RESTATED
BY-LAWS
OF
THE MONTGOMERY FUNDS II
A DELAWARE BUSINESS TRUST
(formerly, "Montgomery Investment Trust")
Article I
OFFICES
Section 1. PRINCIPAL OFFICE. The Board of Trustees shall fix and, from
time to time, may change the location of the principal executive office of The
Montgomery Funds II (the "Trust") at any place within or outside the State of
Delaware.
Section 2. DELAWARE OFFICE. The Board of Trustees shall establish a
registered office in the State of Delaware and shall appoint as the Trust's
registered agent for service of process in the State of Delaware an individual
resident of the State of Delaware or a Delaware corporation or a corporation
authorized to transact business in the State of Delaware; in each-case the
business office of such registered agent for service of process shall be
identical with the registered Delaware office of the Trust.
Section 3. OTHER OFFICES. The Board of Trustees may at any time
establish branch or subordinate offices at any place or places where the Trust
intends to do business.
Article II
MEETINGS OF SHAREHOLDERS
Section 1. PLACE OF MEETINGS. Meetings of shareholders shall be held at
any place designated by the Board of Trustees. In the absence of any such
designation, shareholders' meetings shall be held at the principal executive
office of the Trust.
Section 2. CALL OF MEETING. A meeting of the shareholders may be called
at any time by the Board of Trustees or by the Chairman of the Board or by the
President.
Section 3. NOTICE OF SHAREHOLDERS' MEETING. All notices of meetings of
shareholders shall be sent or otherwise given in accordance with Section 4 of
this Article II not less than seven (7) nor more than seventy-five (75) days
before the date of the meeting. The notice shall specify (i) the place, date and
hour of the meeting, and (ii) the general nature of the business to be
transacted. The notice of any meeting at
<PAGE>
which Trustees are to be elected also shall include the name of any nominee or
nominees whom at the time of the notice are intended to be presented for
election.
If action is proposed to be taken at any meeting for approval of (i) a
contract or transaction in which a Trustee has a direct or indirect financial
interest, (ii) an amendment of the Trust's Agreement and Declaration of Trust,
(iii) a reorganization of the Trust, or (iv) a voluntary dissolution of the
Trust, the notice shall also state the general nature of that proposal.
Section 4. MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE. Notice of any
meeting of shareholders shall be given either personally or by first-class mail
or telegraphic or other written communication, charges prepaid, addressed to the
shareholder at the address of that shareholder appearing on the books of the
Trust or its transfer agent or given by the shareholder to the Trust for the
purpose of notice. If no such address appears on the Trust's books or is given,
notice shall be deemed to have been given if sent to that shareholder by
first-class mail or telegraphic or other written communication to the Trust's
principal executive office, or if published at least once in a newspaper of
general circulation in the county where that office is located. Notice shall be
deemed to have been given at the time when delivered personally or deposited in
the mail or sent by telegram or other means of written communication.
If any notice addressed to a shareholder at the address of that
shareholder appearing on the books of the Trust is returned to the Trust by the
United States Postal Service marked to indicate that the Postal Service is
unable to deliver the notice to the shareholder at that address, all future
notices or reports shall be deemed to have been duly given without further
mailing if these shall be available to the shareholder on written demand of the
shareholder at the principal executive office of the Trust for a period of one
year from the date of the giving of the notice.
An affidavit of the mailing or other means of giving any notice of any
shareholder's meeting shall be executed by the Secretary, Assistant Secretary or
any transfer agent of the Trust giving the notice and shall be filed and
maintained in the minute book of the Trust.
Section 5. ADJOURNED MEETING; NOTICE. Any shareholder's meeting,
whether or not a quorum is present, may be adjourned from time to time by the
vote of the majority of the shares represented at that meeting, either in person
or by proxy.
When any meeting of shareholders is adjourned to another time or place,
notice need not be given of the adjourned meeting at which the adjournment is
taken, unless a new record date of the adjourned meeting is fixed or unless the
adjournment is for more than sixty (60) days from the date set for the original
meeting, in which case the Board of Trustees shall set a new record date. Notice
of any such adjourned meeting shall be given to each shareholder of record
entitled to vote at the adjourned meeting in accordance with
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the provisions of Sections 3 and 4 of this Article II. At any adjourned meeting,
the Trust may transact any business which might have been transacted at the
original meeting.
Section 6. VOTING. The shareholders entitled to vote at any meeting of
shareholders shall be determined in accordance with the provisions of the
Agreement and Declaration of Trust of the Trust, as in effect at such time. The
shareholders' vote may be by voice vote or by ballot, provided, however, that
any election for Trustees must be by ballot if demanded by any shareholder
before the voting has begun. On any matter other than elections of Trustees, any
shareholder may vote part of the shares in favor of the proposal and refrain
from voting the remaining shares or vote them against the proposal, but if the
shareholder fails to specify the number of shares which the shareholder is
voting affirmatively, it will be conclusively presumed that the shareholder's
approving vote is with respect to the total shares that the shareholder is
entitled to vote on such proposal.
Section 7. WAIVER OF NOTICE BY CONSENT OF ABSENT SHAREHOLDERS. The
transactions of the meeting of shareholders, however called and noticed and
wherever held, shall be as valid as though had at a meeting duly held after
regular call and notice if a quorum be present either in person or by proxy and
if either before or after the meeting, each person entitled to vote who was not
present in person or by proxy signs a written waiver of notice or a consent to a
holding of the meeting or an approval of the minutes. The waiver of notice or
consent need not specify either the business to be transacted or the purpose of
any meeting of shareholders.
Attendance by a person at a meeting shall also constitute a waiver of
notice of that meeting, except when the person objects at the beginning of the
meeting to the transaction of any business because the meeting is not lawfully
called or convened and except that attendance at a meeting is not a waiver of
any right to object to the consideration of matters not included in the notice
of the meeting if that objection is expressly made at the beginning of the
meeting.
Section 8. SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING. Any
action which may be taken at any meeting of shareholders may be taken without a
meeting and without prior notice if a consent in writing setting forth the
action so taken is signed by the holders of outstanding shares having not less
than the minimum number of votes that would be necessary to authorize or take
that action at a meeting at which all shares entitled to vote on that action
were present and voted. All such consents shall be filed with the Secretary of
the Trust and shall be maintained in the Trust's records. Any shareholder giving
a written consent or the shareholder's proxy holder or a transferee of the
shares or a personal representative of the shareholder or their respective proxy
holders may revoke the consent by a writing received by the Secretary of the
Trust before written consents of the number of shares required to authorize the
proposed action have been filed with the Secretary.
If the consents of all shareholders entitled to vote have not been
solicited in writing and if the unanimous written consent of all such
shareholders shall not have been received, the Secretary shall give prompt
notice of the action approved by the
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shareholders without a meeting. This notice shall be given in the manner
specified in Section 4 of this Article II. In the case of approval of (i)
contracts or transactions in which a Trustee has a direct or indirect financial
interest, (ii) indemnification of agents of the Trust, and (iii) a
reorganization of the Trust, the notice shall be given at least ten (10) days
before the consummation of any action authorized by that approval.
Section 9. RECORD DATE FOR SHAREHOLDER NOTICE, VOTING AND GIVING
CONSENTS. For purposes of determining the shareholders entitled to notice of any
meeting or to vote or entitled to give consent to action without a meeting, the
Board of Trustees may fix in advance a record date which shall not be more than
ninety (90) days nor less than seven (7) days before the date of any such
meeting as provided in the Agreement and Declaration of Trust of the Trust.
If the Board of Trustees does not so fix a record date:
(a) The record date for determining shareholders entitled to
notice of or to vote at a meeting of shareholders shall be at
the close of business on the business day next preceding the
day on which notice is given or if notice is waived, at the
close of business on the business day next preceding the day
on i4hich the meeting is held.
(b) The record date for determining shareholders entitled to give
consent to action in writing without a meeting, (i) when no
prior action by the Board of Trustees has been taken, shall be
the day on which the first written consent is given, or (ii)
when prior action of the Board of Trustees has been taken,
shall be at the close of business on the day on which the
Board of Trustees adopt the resolution relating to that action
or the seventy-fifth day before the date of such other action,
whichever is later.
Section 10. PROXIES. Every person entitled to vote for Trustees or on
any other matter shall have the right to do so either in person or by one or
more agents authorized by a written proxy signed by the person and filed with
the Secretary of the Trust. A proxy shall be deemed signed if the shareholder's
name is placed on the proxy (whether by manual signature, typewriting,
telegraphic transmission or otherwise) by the shareholder or the shareholder's
attorney-in-fact. A validly executed proxy which does not state that it is
irrevocable shall continue in full force and effect unless (i) revoked by the
person executing it before the vote pursuant to that proxy by a writing
delivered to the Trust stating that the proxy is revoked or by a subsequent
proxy executed by or attendance at the meeting and voting in person by the
person executing that proxy; or (ii) written notice of the death or incapacity
of the maker of that proxy is received by the Trust before the vote pursuant to
that proxy is counted; provided however, that no proxy shall be valid after the
expiration of eleven (11) months from the date of the proxy unless otherwise
provided in the proxy.
Section 11. INSPECTORS OF ELECTION. Before any meeting of shareholders,
the Board of Trustees may appoint any persons other than nominees for
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office to act as inspectors of election at the meeting or its adjournment. If no
inspectors of election are so appointed, the chairman of the meeting may and on
the request of any shareholder or a shareholder's proxy shall, appoint
inspectors of election at the meeting. The number of inspectors shall be either
one (1) or three (3). If inspectors are appointed at A meeting on the request of
one or more shareholders or proxies, the holders of a majority of shares or
their proxies present at the meeting shall determine whether-one (1) or three
(3) inspectors are to be appointed. If any person appointed as inspector fails
to appear or fails or refuses to act, the Chairman of the meeting may and on the
request of any shareholder or a shareholder's proxy, shall appoint a person to
fill the vacancy.
These inspectors shall:
(a) Determine the number of shares outstanding and the voting
power of each, the shares represented at the meeting, the
existence of a quorum and the authenticity, validity and
effect of proxies;
(b) Receive votes, ballots or consents;
(c) Hear and determine all challenges and questions in any way
arising in connection with the right to vote;
(d) Count and tabulate all votes or consents;
(e) Determine when the polls shall close;
(f) Determine the result; and
(g) Do any other acts that may be proper to conduct the election
or vote with fairness to all shareholders.
Article III
TRUSTEES
Section 1. POWERS. Subject to the applicable provisions of the
Agreement and Declaration of Trust of the Trust and these By- Laws relating to
action required to be approved by the shareholders or by the outstanding shares,
the business and affairs of the Trust shall be managed and all powers shall be
exercised by or under the direction of the Board of Trustees.
Section 2. NUMBER OF TRUSTEES. The exact number of Trustees within the
limits specified in the Agreement and Declaration of Trust of the Trust shall be
fixed from time to time by a written instrument signed or a resolution approved
at a duly constituted meeting by a majority of the Board of Trustees.
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Section 3. VACANCIES. Vacancies in the Board of Trustees may be filled
by a majority of the remaining Trustees, though less than a quorum, or by a sole
remaining Trustee, unless the Board of Trustees calls a meeting of shareholders
for the purposes of electing Trustees. In the event that at any time less than a
majority of the Trustees holding office at that time were so elected by the
holders of the outstanding voting securities of the Trust, the Board of Trustees
shall forthwith cause to be held as promptly as possible, and in any event
within sixty (60) days, a meeting of such holders for the purpose of electing
Trustees to fill any existing vacancies in the Board of Trustees, unless such
period is extended by order of the United States Securities and Exchange
Commission.
Notwithstanding the above, whenever and for so long as the Trust is a
participant in or otherwise has in effect a Plan under which the Trust may be
deemed to bear expenses of distributing its shares as that practice is described
in Rule 12b-i under the Investment Company Act of 1940, then the selection and
nomination of the Trustees who are not interested persons of the Trust (as that
term is defined in the Investment Company Act of 1940) shall be, and is,
committed to the discretion of such disinterested Trustees.
Section 4. PLACE OF MEETINGS AND MEETINGS BY TELEPHONE. All meetings of
the Board of Trustees may be held at any place that has been designated agreed
to by the Board. In the absence of such a designation, regular meetings shall be
held at the- principal executive office of the Trust. With the exception of
meetings at which an Investment Management Agreement, Portfolio Advisory
Agreement or any Distribution Plan adopted pursuant to Rule 12b-1 is approved by
the Board, any meeting, regular or special, may be held by conference telephone
or similar communication equipment, so long as all Trustees participating in the
meeting can hear one another, and all such Trustees shall be deemed to be
present in person at the meeting.
Section 5. REGULAR MEETINGS. Regular meetings of the Board of Trustees
shall be held without call at such time as shall from time to time be fixed by
the Board of Trustees. Such regular meetings may be held without notice.
Section 6. SPECIAL MEETINGS. Special meetings of the Board of Trustees
for any purpose or purposes may be called at any time by the chairman of the
Board or the President or any Vice President or the Secretary or any two (2)
Trustees.
Notice of the time and place of special meetings shall be delivered
personally or by telephone to each Trustee or sent by first-class mail or
telegram, charges prepaid, addressed to each Trustee at that Trustee's address
as it is shown on the records of the Trust. In case the notice is mailed, it
shall be deposited in the United States mail at least seven (7) calendar days
before the time of the holding of-the meeting. In case the notice is delivered
personally or by telephone or to the telegraph company or by express mail or
similar service, it shall be given at least forty-eight (48) hours before the
time of the holding of the meeting. Any oral notice given personally or by
telephone may be communicated either to the Trustee or to a person at the office
of the Trustee whom the person giving the notice has reason to believe will
promptly communicate it to the
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Trustee. The notice need not specify the purpose of the meeting or the place if
the meeting is to be held at the principal executive office of the Trust.
Section 7. QUORUM. A majority of the authorized number of Trustees
shall constitute a quorum for the transaction of business, except to adjourn as
provided in Section 10 of this Article III. Every act or decision done or made
by a majority of the Trustees present at a meeting duly held at which a quorum
is present shall be regarded as the act of the Board of Trustees, subject to the
provisions of the Trust's Agreement and Declaration of Trust. A meeting at which
a quorum is initially present may continue to transact business notwithstanding
the withdrawal of Trustees if any action taken is approved by a least a majority
of the required quorum for that meeting.
Section 8. WAIVER OF NOTICE. Notice of any meeting need not be given to
any Trustee who either before or after the meeting signs a written waiver of
notice, a consent to holding the meeting, or an approval of the minutes. The
waiver of notice or consent need not specify the purpose of the meeting. All
such waivers, consents, and approvals shall be filed with the records of the
Trust or made a part of the minutes of the meeting. Notice of a meeting shall
also be deemed given to any Trustee who attends the meeting without protesting
before or at its commencement the lack of notice to that Trustee.
Section 9. ADJOURNMENT. A majority of the Trustees present, whether or
not constituting a quorum, may adjourn any meeting to another time and place.
Section 10. NOTICE OF ADJOURNMENT. Notice of the time and place of
holding an adjourned meeting need not be given unless the meeting is adjourned
for more than forty-eight (48) hours, in which case notice of the time and place
shall be given before the time of the adjourned meeting in the manner specified
in Section 7 of this Article III to the Trustees who were present at the time of
the adjournment.
Section 11. ACTION WITHOUT A MEETING. With the exception of the
approval of an investment management agreement, portfolio advisory agreement, or
any distribution plan adopted pursuant to Rule 12b-1, any action required or
permitted to be taken by the Board of Trustees may be taken without a meeting if
a majority of the members of the Board of Trustees shall individually or
collectively consent in writing to that action. Such action by written consent
shall have the same force and effect as a majority vote of the Board of
Trustees. Such written consent or consents shall be filed with the minutes of
the proceedings of the Board of Trustees.
Section 12. FEES AND COMPENSATION OF TRUSTEES. Trustees and members of
committees may receive such compensation, if any, for their services and such
reimbursement of expenses as may be fixed or determined by resolution of the
Board of Trustees. This Section 12 shall not be construed to preclude any
Trustee from serving the Trust in any other capacity as an officer, agent,
employee or otherwise and receiving compensation for those services.
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Section 13. DELEGATION OF POWER TO OTHER TRUSTEES. Any Trustee may, by
power of attorney, delegate his or her 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 fewer than two (2) Trustees personally exercise the powers granted to
the Trustees under the Trust's Agreement and Declaration of Trust except as
otherwise expressly provided herein or by resolution of the Board of Trustees.
Except where applicable law may require a Trustee to be present in person, a
Trustee represented by another Trustee pursuant to such power of attorney shall
be deemed to be present for purposes of establishing a quorum and satisfying the
required majority vote.
Article IV
COMMITTEES
Section 1. COMMITTEES OF TRUSTEES. The Board of Trustees may by
resolution adopted by a majority of the authorized number of Trustees designate
one or more committees, each consisting of one (1) or more Trustees, to serve at
the pleasure of the Board. The Board may designate one or more Trustees as
alternate members of any committee who may replace any absent member at any
meeting of the committee. Any committee to the extent provided in the resolution
of the Board, shall have the authority of the Board, except with respect to:
(a) the approval of any action which under applicable law also
requires shareholders' approval or approval of the outstanding
shares, or requires approval by a majority of the entire Board
or certain members of said Board;
(b) the filling of vacancies on the Board of Trustees or in any
committee;
(c) the fixing of compensation of the Trustees for serving on the
Board of Trustees or on any committee;
(d) the amendment or repeal of the Trust's Agreement and
Declaration of Trust or of the By-Laws or the adoption of new
By-Laws;
(e) the amendment or repeal of any resolution of the Board of
Trustees which by its express terms is not so amendable or
repealable;
(f) a distribution to the shareholders of the Trust, except at a
rate or in a periodic amount or within a designated range
determined by the Board of Trustees; or
(g) the appointment of any other committees of the Board of
Trustees or the members of these committees.
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Section 2. MEETINGS AND ACTION OF COMMITTEES. Meetings and action of
committees shall be governed by and held and taken in accordance with the
provisions of Article III of these By-Laws, with such changes in the context
thereof as are necessary to substitute the committee and its members for the
Board of Trustees and its members, except that the time of regular meetings of
committees may be determined either by resolution of the Board of Trustees or by
resolution of the committee. Special meetings of committees may also be called
by resolution of the Board of Trustees. Alternate members shall be given notice
of meetings of committees and shall have the right to attend all meetings of
committees. The Board of Trustees may adopt rules for the government of any
committee not inconsistent with the provisions of these By-Laws.
Article V
OFFICERS
Section 1. OFFICERS. The officers of the Trust shall be a President, a
Secretary and a Treasurer. The Trust may also have, at the discretion of the
Board of Trustees, a Chairman of the Board, one or more Vice Presidents, one or
more Assistant secretaries, one or more Assistant Treasurers, and such other
officers as may be appointed in accordance with the provisions of Section 3 of
this Article V. Any number of offices may be held by the same person.
Section 2. ELECTION OF OFFICERS. The officers of the Trust, except such
officers as may appointed in accordance with the provisions of Section 3 or
Sections of this Article V, shall be chosen by the Board of Trustees, and each
shall serve at the pleasure of the Board of Trustees, subject to the rights, if
any, of an officer under any contract of employment.
Section 3. SUBORDINATE OFFICERS. The Board of Trustees may appoint and
may empower the President to appoint such other officers as the business of the
Trust may require, each of whom shall hold office for such period, have such
authority and perform such duties as are provided in these By-Laws or as the
Board of Trustees may from time to time determine.
Section 4. REMOVAL AND RESIGNATION OF OFFICERS. Subject to the rights,
if any, of an officer under any contract of employment, any officer may be
removed, either with or without cause, by the Board of Trustees at any regular
or special meeting of the Board of Trustees or by the principal executive
officer or by such other officer upon whom such power of removal may be
conferred by the Board of Trustees.
Any officer may resign at any time by giving written notice to the
Trust. Any resignation shall take effect at the date of the receipt of that
notice or at any later time specified in that notice; and unless otherwise
specified in that notice, the acceptance of the resignation shall not be
necessary to make it effective. Any resignation is without
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prejudice to the rights, if any, of the Trust under any contract to which the
officer is a party.
Section 5. VACANCIES IN OFFICES. A vacancy in any office. because of
death, resignation, removal, disqualification or other cause shall be filled in
the manner prescribed in these By-Laws for regular appointment to that office.
The President (or the Chairman of the Board if one is appointed as principal
executive officer) may make temporary appointments to a vacant office pending
action by the Board of Trustees.
Section 6. CHAIRMAN OF THE BOARD. The Chairman of the Board, if such an
Officer is elected, shall, if present, preside at meetings of the Board of
Trustees, subject to the control of the Board of Trustees, have general
supervision, direction and control of the business and the Officers of the Trust
and exercise and perform such other powers and duties as may be from time to
time assigned to him or her by the Board of Trustees or prescribed by the
By-Laws. The Chairman of the Board shall serve as principal executive officer if
the Trustees so appoint him or her.
Section 7. PRESIDENT. Subject to such supervisory powers, if any, as
may be given by the Board of Trustees to the Chairman of the Board, if there be
such an officer, the President shall, subject to the control of the Board of
Trustees and the Chairman, have general supervision, direction and control of
the business and the officers of the Trust. Subject to Section 6 of this Article
V, he or she shall preside at all meetings of the shareholders and, in the
absence of the Chairman of the Board or if there be none, at all meetings of the
Board of Trustees. He or she shall have the general powers and duties of
management usually vested in the offices of president, chief executive officer
and chief operating officer of a corporation and shall have such other powers
and duties as may be prescribed by the Board of Trustees or these By-Laws.
Section 8. VICE PRESIDENTS. In the absence or disability of the
President, the Vice Presidents, if any, in order of their rank as fixed by the
Board of Trustees or if not ranked, the Executive Vice President (who shall be
considered first ranked) and such other Vice Presidents as shall be designated
by the Board of Trustees, shall perform all the duties of the President and,
when so acting, shall have all powers of and be subject to all the restrictions
upon the President. The Vice Presidents shall have such other powers and perform
such other duties as from time to time may be prescribed for them respectively
by the Board of Trustees or the President or the Chairman of the Board or by
these By-Laws.
Section 9. SECRETARY. The Secretary shall keep or cause to be kept at
the principal executive office of the Trust or such other place as the Board of
Trustees may direct a book of minutes of all meetings and actions of Trustees,
committees of Trustees and shareholders with the time and place of holding,
whether regular or special, and if special, how authorized, the notice given,
the names of those present at Trustees' meetings or committee meetings, the
number of shares present or represented at shareholders' meetings, and the
proceedings.
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The Secretary shall keep or cause to be kept at the principal executive
office of the Trust or at the office of the Trust's transfer agent or registrar,
a share register or a duplicate share register showing the names of all
shareholders and their addresses, the number and classes of shares held by each,
the number and date of certificates issued for the same and the number and date
of cancellation of every certificate surrendered for cancellation.
The Secretary shall give or cause to be given notice of all meetings of
the shareholders and of the Board of Trustees required to be given by these
By-Laws or by applicable law and shall have such other powers and perform such
other duties as may be prescribed by the Board of Trustees or by these By-Laws.
Section 10. TREASURER. The Treasurer shall be the chief financial
officer and chief accounting officer of the Trust and shall keep and maintain or
cause to be kept and maintained - adequate and correct books and records of
accounts of the properties and business transactions of the Trust, including
accounts of its assets, liabilities, receipts, disbursements, gains, losses,
capital, retained earnings and shares. The books of account shall at all
reasonable times be open to inspection by a, Trustee.
The Treasurer shall deposit all monies and other valuables in the name
and to the credit of the Trust with such depositories as may be designated by
the Board of Trustees. The Treasurer shall disburse the funds of the Trust as
may be ordered by the Board of Trustees, shall render to the President and
Trustees, whenever they request it, an account of all of his or her transactions
as chief financial officer and of the financial condition of the Trust and shall
have other powers and perform such other duties as may be prescribed by the
Board of Trustees or these By-Laws.
Article VI
INDEMNIFICATION OF TRUSTEES OFFICERS
EMPLOYEES AND OTHER AGENTS
Section 1. AGENTS, PROCEEDINGS AND EXPENSES. For the purpose of this
Article, "agent" means any person who is or was a Trustee, officer, employee or
other agent of this Trust or is or was serving at the request of this Trust as a
Trustee, director, officer, employee or agent of another foreign or domestic
corporation, partnership, joint venture, trust or other enterprise or was a
Trustee, director, officer, employee or agent of a foreign or domestic
corporation that was a predecessor of another enterprise at the request of such
predecessor entity; "proceeding" means any threatened, pending or completed
action or proceeding, whether civil, criminal, administrative or investigative;
and "expenses" includes, without limitation, attorney's fees and any expenses of
establishing a right to indemnification under this Article.
Section 2. ACTIONS OTHER THAN BY TRUST. This Trust shall indemnify any
person who was or is a party or is threatened to be made a party to any
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proceeding (other than an action by or in the right of this Trust) by reason of
the fact that such person is or was an agent of this Trust, against expenses,
judgments, fines, settlements and other amounts actually and reasonably incurred
in connection with such proceeding, if it is determined that person acted in
good faith and reasonably believed: (a) in the case of conduct in his or her
official capacity as a Trustee of the Trust, that his or her conduct was in the
Trust's best interests and (b), in all other cases, that his or her conduct was
at least not opposed to the Trust's best interests and (c) in the case of a
criminal proceeding, that he or she had no reasonable cause to believe the
conduct of that person was unlawful. The termination of any proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contenders or its
equivalent shall not of itself create a presumption that the person did not act
in good faith and in a manner which the person reasonably believed to be in the
best interests of this Trust or that the person had reasonable cause to believe
that the person's conduct was unlawful.
Section 3. ACTIONS BY THE TRUST. This Trust shall indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action by or in the right of this Trust to procure a
judgment in its favor by reason of the fact that that person is or was an agent
of this Trust, against expenses actually and reasonably incurred by that person
in connection with the defense or settlement of that action if that person acted
in good faith, in a manner that person believed to be in the best interests of
this Trust and with such care, including reasonable inquiry, as an ordinarily
prudent person in a like position would use under similar circumstances.
Section 4. EXCLUSION OF INDEMNIFICATION. Notwithstanding any provision
to the contrary contained herein, there shall be no right to indemnification for
any liability arising by reason of willful misfeasance, bad faith, gross
negligence, or the reckless disregard of the duties involved in the conduct of
the agent's office with this Trust.
No indemnification shall be made under Sections 2 or 3 of this Article:
(a) In respect of any claim, issue or matter as to which that
person shall have been adjudged to be liable on the basis that
personal benefit was improperly received by him or her,
whether or not the benefit resulted from an action taken in
the person's official capacity; or
(b) In respect of any claim, issue or matter as to which that
person shall have been adjudged to be liable in the
performance of that person's duty to this Trust, unless and
only to the extent that the court in which that action was
brought shall determine upon application that in view of all
the circumstances of the case, that person was not liable by
reason of the disabling conduct set forth in the preceding
paragraph and is fairly and reasonably entitled to indemnity
for the expenses which the court shall determine; or
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(c) of amounts paid in settling or otherwise disposing of a
threatened or pending action, with or without court approval,
or of expenses incurred in defending a threatened or pending
action that is settled or otherwise disposed of without court
approval, unless the required approval set forth in Section 6
of this Article is obtained.
Section 5. SUCCESSFUL DEFENSE BY AGENT. To-the extent that an agent of
this Trust has been successful on the merits in - defense of any proceeding
referred to in Sections 2 or 3 of this Article or in defense of any claim, issue
or matter therein, before the court or other body before whom the proceeding was
brought, the agent shall be indemnified against expenses actually and reasonably
incurred by the agent in connection therewith, provided that the Board of
Trustees, including a majority who are disinterested, non-party Trustees, also
determines that, based upon a review of the facts, the agent was not liable by
reason of the disabling conduct referred to in Section 4 of this Article.
Section 6. REOUIRED APPROVAL. Except as provided in Section 5 of this
Article, any indemnification under this Article shall be made by this Trust only
if authorized in the specific case on a determination that indemnification of
the agent is proper in the circumstances because the agent has met the
applicable standard of conduct set forth in Sections 2 or 3 of this Article and
is not prohibited from indemnification because of the disabling conduct set
forth in Section 4 of this Article, by:
(a) a majority vote of a quorum consisting of Trustees who are not
parties to the proceeding and are not interested persons of
the Trust (as defined in the Investment Company Act of 1940);
or
(b) a written opinion by an independent legal counsel.
Section 7. ADVANCE OF EXPENSES. Expenses incurred in defending any
proceeding may be advanced by this Trust before the final disposition of the
proceeding upon a written undertaking by or on behalf of the agent, to repay the
amount of the advance if it is ultimately determined that he or she is not
entitled to indemnification, together with at least one of the following as a
condition to the advance: (i) security for the undertaking; or (ii) the
existence of insurance protecting the Trust against losses arising by reason of
any lawful advances; or (iii) a determination by a majority of a quorum of
Trustees who are not parties to the proceeding and are not interested persons of
the Trust, or by an independent legal counsel in a written opinion, based on a
review of readily available facts, that there is reason to believe that the
agent ultimately will be found entitled to indemnification. Determinations and
authorizations of payments under this Section must conform to the standards set
forth in Section 6 of this Article for determining that the indemnification is
permissible.
Section 8. OTHER CONTRACTUAL RIGHTS. Nothing contained in this Article
shall affect any right to indemnification to which persons other than Trustees
and officers of this Trust or any subsidiary hereof may be entitled by contract
or otherwise.
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Section 9. LIMITATIONS. No indemnification or advance shall be made
under this Article, except as provided in Sections 5 or 6 in any circumstances
where it appears:
(a) that it would be inconsistent with a provision of the Trust's
Agreement and Declaration of Trust, a resolution of the
shareholders of the Trust, or an agreement in effect at the
time of accrual of the alleged cause of action asserted in the
proceeding in which the expenses were incurred or other
amounts were paid which prohibits or otherwise limits
indemnification; or
(b) that it would be inconsistent with any condition expressly
imposed by a court in approving a settlement.
Section 10. INSURANCE. Upon and in the event of a determination by the
Board of Trustees of this Trust to purchase such insurance, this Trust shall
purchase and maintain insurance on behalf of any agent of this Trust against any
liability asserted against or incurred by the agent in such capacity or arising
out of the agent's status as such, but only to the extent that this Trust would
have the power to indemnify the agent against that liability under the
provisions of this Article and the Trust's Agreement and Declaration of Trust.
Section 11. FIDUCIARIES OF EMPLOYEE BENEFIT PLAN. This Article VI does
not apply to any proceeding against any Trustee, investment manager or other
fiduciary of an employee benefit plan in that person's capacity as such, even
though that person may also be an agent of this Trust as defined in Section 1 of
this Article VI. Nothing contained in this Article VI shall limit any right to
indemnification to which such a Trustee, investment manager, or other fiduciary
may be entitled by contractor, otherwise which shall be enforceable to the
extent permitted by applicable law other than this Article VI.
Article VII
RECORDS AND REPORTS
Section 1. MAINTENANCE AND INSPECTION OF SHARE REGISTER. This Trust
shall keep at its principal executive office or at the office of its transfer
agent or registrar, if either be appointed and as determined by resolution of
the Board of Trustees, a record of its shareholders, giving the names and
addresses of all shareholders and the number, series and, where applicable,
class of shares held by each shareholder.
Section 2. MAINTENANCE AND INSPECTION OF BY-LAWS. The Trust shall keep
at its principal executive office the original or a copy of these By-Laws
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<PAGE>
as amended from time to time, which shall be open to inspection by the
shareholders at all reasonable times during office hours.
Section 3. MAINTENANCE AND INSPECTION OF-OTHER RECORDS. The accounting
books and records and minutes of proceedings of the shareholders and the Board
of Trustees and any committee or - committees of the Board of Trustees shall be
kept at such place or places designated by the Board of Trustees or in the
absence of such designation, at the principal executive office of the Trust. The
minutes shall be kept in written form, and the accounting books and records
shall be kept either in written form or in any other form capable of being
converted into written form. The minutes and accounting books and records shall
be open to inspection upon the written demand of any shareholder or holder of a
voting trust certificate at any reasonable time during usual business hours of
the Trust for a purpose reasonably related to the holder's interests as a
shareholder or as the holder of a voting trust certificate. The inspection may
be made in person or by an agent or attorney and shall include the right to copy
and make extracts.
Section 4. INSPECTION BY TRUSTEES. Every Trustee shall have the
absolute right at any reasonable time to inspect all books, records and
documents of every kind as well as the physical properties of the Trust. This
inspection by a Trustee may be made in person or by an agent or attorney, and
the right of inspection includes the right to copy and make extracts of
documents.
Section 5. FINANCIAL STATEMENTS. A copy of any financial statements and
any income statement of the Trust for each quarterly period of each fiscal year
and accompanying balance sheet of the Trust as of the end of each such period
that has been prepared by the Trust shall be kept on file in the principal
executive office of the Trust for at least twelve (12) months, and each such
statement shall be exhibited at all reasonable times to any shareholder
demanding an examination of any such statement or a copy shall be mailed to any
such shareholder.
The quarterly income statements and balance sheets referred to in this
section shall be accompanied by the report, if any, of any independent
accountants engaged by the Trust or the certificate of an authorized officer of
the Trust that the financial statements were prepared without audit from the
books and records of the Trust.
Article VIII
GENERAL MATTERS
Section 1. CHECKS, DRAFTS, EVIDENCE OF INDEBTEDNESS. All checks, drafts
or other orders for payment of money, notes or other evidences of indebtedness
issued in the name of or payable to the Trust shall be signed or endorsed in
such manner and by such person or persons as shall be designated from time to
time in accordance with the resolution of the Board of Trustees.
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Section 2. CONTRACTS AND INSTRUMENTS; HOW EXECUTED. The Board of
Trustees, except as otherwise provided in these By-Laws, may authorize any
officer or officers, agent or agents, to enter into any contract or execute any
instrument in the name of and on behalf of the Trust and this authority may be
general or confined to specific instances; and unless so authorized or ratified
by the Board of Trustees or within the agency power of an officer, no officer,
agent or employee shall have any power or authority to bind the Trust by any
contract or engagement, to pledge its credit or to render it liable for any
purpose or for any amount.
Section 3. CERTIFICATES FOR SHARES. Upon resolution of the Board to
issue certificated shares, a certificate or certificates for shares of
beneficial interest in any series of the Trust may be issued to a shareholder
upon the shareholder's request when such shares are fully paid. All certificates
shall be signed in the name of the Trust by the Chairman of the Board or the
President or Vice President and by the Treasurer or an Assistant Treasurer or
the Secretary or any Assistant Secretary, certifying the number of shares and
the series of shares owned by the shareholders. Any or all of the signatures on
the certificate may be facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed on a
certificate shall have ceased to be that officer, transfer agent or registrar
before that certificate is issued, it may be issued by the Trust with the same
effect as if that person were an officer, transfer agent or registrar at the
date of issue. Notwithstanding the foregoing, the Trust may adopt and use a
system of issuance, recordation and transfer of its shares by electronic or
other means.
Section 4. LOST CERTIFICATES. Except as provided in this Section 4, no
new certificate for shares shall be issued to replace an old certificate unless
the latter is surrendered to the Trust and canceled at the same time. The Board
of Trustees may in case any share certificate or certificate for any other
security is lost, stolen or destroyed, authorize the issuance of a replacement
certificate on such terms and conditions as the Board of Trustees may require,
including a provision for . indemnification of the Trust secured by a bond or
other adequate security sufficient to protect the Trust against any claim that
may be made against it, including any expense or liability on account of the
alleged loss, theft or destruction of the certificate or the issuance of the
replacement certificate.
Section 5. REPRESENTATION OF SHARES OF OTHER ENTITIES HELD BY TRUST.
The Chairman of the Board, the President, any Vice President or any other person
authorized by resolution of the Board of Trustees or by any of the foregoing
designated officers, is authorized to vote or represent on behalf of the Trust
any and all shares of any corporation, partnership, trusts or other entities,
foreign or domestic, standing in the name of the Trust. The authority granted
may be exercised in person or by a proxy duly executed by such designated
person.
Section 6. FISCAL YEAR. The fiscal year of the Trust shall be fixed and
refixed or changed from time to time by resolution of the Trustees. The fiscal
year of the Trust shall be the taxable year of each Series of the Trust.
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Article IX
AMENDMENTS
Section 1. AMENDMENT BY SRAREHOLDERS. These By-Laws may be amended or
repealed by the affirmative vote or written consent of a majority of the
outstanding shares entitled to vote, except as otherwise provided by applicable
law or by the Trust's Agreement and Declaration of Trust or these By-Laws.
Section 2. AMENDMENT BY TRUSTEES. Subject to the right of shareholders
as provided in Section 1 of this Article IX to adopt, amend or repeal By-Laws,
and except as otherwise provided by applicable law or by the Trust's Agreement
and Declaration of Trust, these By-Laws may be adopted, amended or repealed by
the Board of Trustees.
Section 3. INCORPORATION BY REFERENCE INTO AGREEMENT AND DECLARATION OF
TRUST OF THE TRUST. These By-Laws and any amendments thereto shall be
incorporated by reference to the Trust's Agreement and Declaration of Trust.
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Item 23 (g)
Form of
Custody Agreement
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<PAGE>
FORM OF
CUSTODY AGREEMENT
This Custody Agreement is dated ______________________ between
MORGAN STANLEY TRUST COMPANY, a New York State chartered trust company (the
"Custodian") and THE MONTGOMERY FUNDS II, a Delaware business trust (the
"Client"), on behalf of each investment portfolio of the Client listed in
Appendix 2 (each hereinafter referred to as "the Accounts"), as such appendix
may be amended from time to time.
1. Appointment and Acceptance; Accounts.
(a) The Client hereby appoints the Custodian as a custodian of
Property (as defined below) owned or under the control of the Client that are
delivered to the Custodian, or any Subcustodian as appointed below, from time to
time to be held in custody for the benefit of the Client.
(b) Prior to the delivery of any Property by the Client to the
Custodian, the Client shall deliver to the Custodian each document and other
item listed, in Appendix 1. In addition, the Client shall deliver to the
Custodian any additional documents or items as the Custodian may deem necessary
for the performance of its duties under this Agreement.
(c) The Client instructs the Custodian to establish on the
books and records of the Custodian the accounts listed in Appendix 2 (the
"Accounts") in the name of the Client. Upon receipt of Authorized Instructions
(as defined below) and appropriate documentation, the Custodian shall open
additional Accounts for the Client. Upon the Custodian's confirmation to the
Client of the opening of such additional Accounts, or of the closing of
Accounts, Appendix 2 shall be deemed automatically amended or supplemented
accordingly. The Custodian shall record in the Accounts and shall have general
responsibility for the safekeeping of all securities ("Securities"), cash, cash
equivalents and other property (all such Securities, cash, cash equivalents and
other property being collectively the "Property") of the Client that are
delivered to the Custodian for custody.
(d) The procedures the Custodian and the Client will use in
performing activities in connection with this Agreement are set forth in a
client services guide provided to the Client by the Custodian, as such guide may
be amended from time to time by the Custodian by written notice to the Client
(the "Client Services Guide").
2. Subcustodians. The Property may be held in custody and deposit
accounts that have been established by the Custodian with one or more domestic
or foreign banks or other institutions as listed on Exhibit A (the
"Subcustodians"), as such Exhibit may be amended from time to time by the
Custodian by written notice to the Client, or through the facilities of one or
more securities depositories or clearing agencies. The Custodian
<PAGE>
shall hold Property through a Subcustodian, securities depository or clearing
agency only if (a) such Subcustodian and any securities depository or clearing
agency in which such Subcustodian or the Custodian holds Property, or any of
their creditors, may not assert any right, charge, security interest, lien,
encumbrance or other claim of any kind to such Property except a claim of
payment for its safe custody or administration and (b) beneficial ownership of
such Property may be freely transferred without the payment of money or value
other than for safe custody or administration. Any Subcustodian may hold
Property in a securities depository and may utilize a clearing agency.
3. Records. With respect to Property held by a Subcustodian:
(a) The Custodian may hold Property for all of its customers
with a Subcustodian in a single account identified as belonging to the Custodian
for the benefit of its customers;
(b) The Custodian shall identify on its books as belonging to
the Client any Property held by a Subcustodian for the Custodian's account;
(c) The Custodian shall require that Property held by the
Subcustodian for the Custodian's account be identified on the Subcustodian's
books as separate from any other property held by the Subcustodian other than
property of the Custodian's customers held solely for the benefit of customers
of the Custodian; and
(d) In the event the Subcustodian holds Property in a
securities depository or clearing agency, such Subcustodian shall be required by
its agreement with the Custodian to identify on its books such Property as being
held for the account of the Custodian as custodian for its customers or in such
other manner as is required by local law or market practice.
4. Access to Records. The Custodian shall allow the Client's
accountants reasonable access to the Custodian's records relating to the
Property held by the Custodian as such accountants may reasonably require in
connection with their examination of the Client's affairs. The Custodian shall
also obtain from any Subcustodian (and shall require each Subcustodian to use
reasonable efforts to obtain from any securities depository or-clearing agency
in which it deposits Property) an undertaking, to the extent consistent with
local practice and the laws of the jurisdiction or jurisdictions to which such
Subcustodian, securities depository or clearing agency is subject, to permit
independent public accountants such reasonable access to the records of such
Subcustodian, securities depository or clearing agency as may be reasonably
required in connection with the examination of the Client's affairs or to take
such other action as the Custodian in its judgment may deem sufficient to ensure
such reasonable access.
5. Reports. The Custodian shall provide such reports and other
information to the Client and to such persons as the Client directs as the
Custodian and the Client may agree from time to time.
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6. Payment of Monies. The Custodian shall make, or cause any
Subcustodian to make, payments from monies being held in the Accounts only in
accordance with Authorized instructions or as provided in Sections 9, 13 and 17.
The Custodian may act as the Client's agent or act as a principal in
foreign exchange transactions at such rates as are agreed from time to time
between the Client and the Custodian.
7. Transfer of Securities. The Custodian shall make, or cause any
Subcustodian to make, transfers, exchanges or deliveries of Securities only in
accordance with Authorized Instructions or as provided in Sections 9, 13 and 17.
8. Corporate Action.
(a) The Custodian shall notify the Client of details of all
corporate actions affecting the Client's Securities promptly upon its receipt of
such information.
(b) The Custodian shall take, or cause any Subcustodian to
take, such corporate action only in accordance with Authorized Instructions or
as provided in this Section 8 or Section 9.
(c) In the event the Client does not provide timely Authorized
Instructions to the Custodian, the Custodian shall act in accordance with the
default option provided by local market practice and/or the issuer of the
Securities.
(d) Fractional shares resulting from corporate action activity
shall be treated in accordance with local market practices.
9. General Authority. In the absence of Authorized Instructions to the
contrary, the Custodian may, and may authorize any Subcustodian to:
(a) make payments to itself or others for expenses of handling
Property or other similar items relating to its dudes under this Agreement,
provided that all such payments shall be accounted for to the Client;
(b) receive and collect all income and principal with respect
to Securities and to credit cash receipts to the Accounts;
(c) exchange Securities when the exchange is purely
ministerial (including, without limitation, the exchange of interim receipts or
temporary securities for securities in definitive form and the exchange of
warrants, or other documents of entitlement to securities, for the securities
themselves);
(d) surrender Securities at maturity or when called for
redemption upon receiving payment therefor;
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(e) execute in the Client's name such ownership and other
certificates as may be required to obtain the payment of income from Securities;
(f) pay or cause to be paid, from the Accounts, any and all
taxes and levies in the nature of taxes imposed on Property by any governmental
authority in connection with custody of and transactions in such Property;
(g) endorse for collection, in the name of the Client, checks,
drafts and other negotiable instruments;
(h) take non-discretionary action on mandatory corporate
actions; and
(i) in general, attend to all nondiscretionary details in
connection with the custody, sale, purchase, transfer and other dealings with
the Property.
10. Authorized Instructions: Authorized Persons.
(a) Except as otherwise provided in Sections 6 through 9, 13
and 17, all payments of monies, all transfers, exchanges or deliveries of
Property and all responses to corporate actions shall be made or taken only upon
receipt by the Custodian of Authorized Instructions; provided that such
Authorized Instructions are timely received by the Custodian. "Authorized
Instructions" of the Client means instructions from an Authorized Person
received by telecopy, tested telex, electronic link or other electronic means or
by such other means as may be agreed in writing between the Client and the
Custodian.
(b) "Authorized Person" means each of the persons or entities
identified on Appendix 3 as amended from time to time by written notice from the
Client to the Custodian. The Client represents and warrants to the Custodian
that each Authorized Person listed in Appendix 3, as amended from time to time,
is authorized to issue Authorized Instructions on behalf of the Client. Prior to
the delivery of the Property to the Custodian, the Custodian shall provide a
list of designated system user ID numbers and passwords that the Client shall be
responsible for assigning to Authorized Persons. The Custodian shall assume that
an Electronic transmission received and identified by a system user ID number
and password was sent by an Authorized Person. The Custodian agrees to provide
additional designated system user ID numbers and passwords as needed by the
Client. The Client authorizes the Custodian to issue new system user ID numbers
upon the request of a previously existing Authorized Person. Upon the issuance
of additional system user ID numbers by the Custodian to the Client, Appendix 3
shall be deemed automatically amended accordingly. The Client authorizes the
Custodian to receive, act and rely upon any Authorized Instructions received by
the Custodian which have been issued, or purport to have been issued, by an
Authorized Person.
(c) Any Authorized Person may cancel/correct or otherwise
amend any Authorized Instruction received by the Custodian, but the Client
agrees to indemnify the Custodian for any liability, loss or expense incurred by
the Custodian and its
4
<PAGE>
Subcustodians as a result of their having relied upon or acted on any prior
Authorized Instruction. An amendment or cancellation of an Authorized
instruction to deliver or receive any security or funds in connection with a
trade will not be processed once the trade has settled.
11. Registration of Securities.
(a) In the absence of Authorized Instructions to the contrary,
Securities which must be held in registered form shall be registered in the name
of the Custodian or the Custodian's nominee or, in the case of Securities in the
custody of an entity other than the Custodian, in the name of the Custodian, its
Subcustodian or any such entity's nominee. The Custodian may, without notice to
the Client, cause any Securities to be registered or re-registered in the name
of the Client.
(b) Where the Custodian has been instructed by the Client to
hold any Securities in the name of any person or entity other dm the Custodian,
its Subcustodian or any such entity's nominee, the Custodian shall not be
responsible for any failure to collect such dividends or other income or
participate in any such corporate action with respect to such Securities.
12. Deposit Accounts. All cash received by the Custodian for the
Accounts shall be held by the Custodian as a short-term credit balance in favor
of the Client and, if the Custodian and the Client have agreed in writing in
advance that such credit balances shall bear interest, the Client shall earn
interest at the rates and times as agreed between the Custodian and the Client.
The Client acknowledges that any such credit balances shall not be accompanied
by the benefit of any governmental insurance.
13. Short-term Credit Extensions.
(a) From time to time, the Custodian may extend or arrange
short-term credit for the Client which is (i) necessary in connection with
payment and clearance of securities and foreign exchange transactions or (ii)
pursuant to an agreed schedule, as and if set forth in the Client Services
Guide, of credits for dividends and interest payments on Securities. All such
extensions of credit shall be repayable by the Client on demand.
(b) The Custodian shall be entitled to charge the Client
interest for any such credit extension at rates to be agreed upon from time to
time or, if such credit is arranged by the Custodian with a third party on
behalf of the Client, the Client shall reimburse the Custodian for any interest
charge. In addition to any other remedies available, the Custodian shall be
entitled to a right of set-off against the Property to satisfy the repayment of
such credit extensions and the payment of, or reimbursement for, accrued
interest thereon.
14. Representations and Warranties.
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<PAGE>
(a) The Client represents and warrants that (i) the execution,
delivery and performance of this Agreement (including, without limitation, the
ability to obtain the short-term extensions of credit in accordance with Section
13) are within the Client's power and authority and have been duly authorized by
all requisite action (corporate or otherwise) of the Client and of the
beneficial owner of the Property, if other than the Client, and (ii) this
Agreement and each extension of short-term credit extended to or arranged for
the benefit of the Client in accordance with Section 13 shall at all times
constitute a legal, valid and binding obligation of the Client enforceable
against the Client in accordance with their respective terms, except as may be
limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors, rights in general and subject to the effect of general
principles of equity (regardless of whether considered in a proceeding in equity
or at law).
(b) The Custodian represents and warrants that (i) the
execution, delivery and performance of this Agreement are within the Custodian's
power and authority and have been duly authorized by all requisite action
(corporate or otherwise) of the Custodian and (ii) this Agreement constitutes
the legal, valid and binding obligation of the Custodian enforceable against the
Custodian in accordance with its terms, except as may be limited by bankruptcy,
insolvency or other similar laws affecting the enforcement of creditors' rights
in general and subject to the effect of general principles of equity (regardless
of whether considered in a proceeding in equity or at law).
15. Standard of Care; Indemnification.
(a) The Custodian shall be responsible for the performance of
only such duties as are set forth in this Agreement or contained in Authorized
Instructions given to the Custodian which are not contrary to the provisions of
any relevant law or regulation. The Custodian shall be liable to the Client for
any loss, liability or expense incurred by the Client in connection with this
Agreement to the extent that any such loss, liability or expense results from
the negligence or willful misconduct of the Custodian or any Subcustodian,
prQ3dded that the Custodian shall have no greater or lesser responsibility or
liability to the Client on account of any actions or omissions of any
Subcustodian than the responsibility or liability such Subcustodian has to the
Custodian.
(b) The Client acknowledges that the Property may be
physically held outside the United States. The Custodian shall not be liable for
any loss, liability or expense resulting from events beyond the reasonable
control of the Custodian, including, but not limited to, force majeure.
(c) In addition, the Client shall indemnify the Custodian and
Subcustodians and any nominee for, and hold each of them harmless from, any
liability, loss or expense (including attorneys' fees and disbursements)
incurred in connection with this Agreement, including without limitation, (i) as
a result of the Custodian having acted or relied upon any Authorized
Instructions or (ii) arising out of any such person acting as a nominee or
holder of record of Securities.
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16. Fees; Liens. The Client shall pay to the Custodian from time to
time such compensation for its services pursuant to this Agreement as may be
mutually agreed upon as well as the Custodian's out-of-pocket and incidental
expenses. The Client shall hold the Custodian harmless from any liability or
loss resulting from any taxes or other governmental charges, and any expenses
related thereto, which may be imposed or assessed with respect to the Accounts
or any Property held therein. The Custodian is, and any Subcustodians are,
authorized to charge the Accounts for such items and the Custodian shall have a
lien, charge and security interest on any and all Property for any amount owing
to the Custodian from time to time under this Agreement.
17. Termination. This Agreement may be terminated by the Client or the
Custodian by 60 days written notice to the other, sent by registered mail. If
notice of termination is given, the Client shall, within 30 days following the
giving of such notice, deliver to the Custodian a statement in writing
specifying the successor custodian or other person to whom the Custodian shall
transfer the Property. In either event, the Custodian, subject to the
satisfaction of any lien it may have, shall transfer the Property to the person
so specified. If the Custodian does not receive such statement the Custodian, at
its election, may transfer the Property to a bank or trust company established
under the laws of the United States or any state thereof to be held and disposed
of pursuant to the provisions of this Agreement or may continue to hold the
Property until such a statement is delivered to the Custodian. In such event the
Custodian shall be entitled to fair compensation for its services during such
period as the Custodian remains in possession of any Property and the provisions
of this Agreement relating to the duties and obligations of the Custodian shall
remain in full force and effect; provided, however, that the Custodian shall
have no obligation to wade any transactions in Securities for the Accounts. The
provisions of Sections 15 and 16 shall survive termination of this Agreement.
18. Investment Advice. The Custodian shall not supervise, recommend or
advise the Client relative to the investment, purchase, sale, retention or other
disposition of any Property held under this Agreement.
19. Confidentiality. The Custodian, its agents and employees shall
maintain the confidentiality of information concerning the Property held in the
Client's account, including in dealings with affiliates of the Custodian. In the
event the Custodian or any Subcustodian is requested or required to disclose any
confidential information concerning the Property, the Custodian shall, to the
extent practicable and legally permissible, promptly notify the Client of such
request or requirement so that the Client may seek a protective order or waive
any objection to the Custodian's or such Subcustodian's compliance with this
Section 19. In the absence of such a waiver, if the Custodian or such
Subcustodian is compelled,--in the opinion of its counsel, to disclose any
confidential information, the Custodian or such Subcustodian may disclose such
information to such persons as, in the opinion of counsel, is so required.
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<PAGE>
20. Notices. Any notice or other communication from the Client to the
Custodian, unless otherwise provided by this Agreement or the Client Services
Guide, shall be sent by certified or registered mail to Morgan Stanley Trust
Company, One Pierrepont Plaza, Brooklyn, New York, 11201, Attention: President,
and any notice from the Custodian to the Client is to be mailed postage prepaid,
addressed to the Client at the address appearing below, or as it may hereafter
be changed on the Custodian's records in accordance with written notice from the
Client.
21. Assignment. This contract may not be assigned by either party
without the prior written approval of the other.
22. Miscellaneous.
(a) This Agreement shall bind the successors and assigns of
the Client and the Custodian.
(b) This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York without regard to its
conflicts of law rules and to the extent not preempted by federal law. The
Custodian and the Client hereby irrevocably submit to the exclusive jurisdiction
of any New York State court or any United States District Court located in the
State of New York in any action or proceeding arising out of this Agreement and
hereby irrevocably waive any objection to the venue of any such action or
proceeding brought in any such court or any defense of an inconvenient forum.
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In witness whereof, the parties hereto have set their hands as
of the date first above written.
THE MONTGOMERY FUNDS II
on behalf of each investment
portfolio listed in Appendix 2
By ___________________________________
Name:
Title:
Address for Record: _________________
_________________
_________________
Accepted:
MORGAN STANLEY TRUST COMPANY
By ______________________________
Authorized Signature
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Item 23 (h) (2)
Form of
Shareholder Services Plan
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<PAGE>
THE MONTGOMERY FUNDS
FORM OF
SHAREHOLDER SERVICES PLAN
(Non-Rule 12b-1 Plan)
THIS SHAREHOLDER SERVICES PLAN is made as of the day of August, 1995 by
and between THE MONTGOMERY FUNDS, a Delaware business trust (the "Trust") and
MONTGOMERY ASSET MANAGEMENT, L.P. (the "Adviser"), with respect to each class (a
"Class") of each series (a "Fund") of the Trust set forth in Exhibit A hereto,
as the same may be amended from time to time.
WITNESSETH
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Classes wish to retain the Adviser to provide services to
shareholders of the Classes, and to clients of certain broker-dealers who have
entered, or will enter, into dealer agreements respecting the sale of shares of
the Classes ("Service Providers"), who are shareholders of the Classes, and the
Adviser is willing to furnish such services.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Classes hereby appoint the Adviser or an affiliate
of the Adviser to provide to the Classes the shareholder services specified in
Section 2 of this Plan to all shareholders of the Classes and to clients of the
Service Providers that are shareholders of the Classes. The Adviser accepts such
appointment and agrees to furnish through its own organization, or through the
Service Providers, as the case may be, such shareholder services in return for
compensation as provided in Section 6 of the Plan. The Adviser agrees that the
shareholder services required to be furnished hereunder shall be furnished in
compliance with all relevant provisions of state, federal and foreign law and
with all applicable rules and regulations of all relevant regulatory agencies,
including, without limitation, the 1940 Act, the Securities Exchange Act of
1934, as amended, the applicable rules and regulations promulgated thereunder,
and the Rules of Fair Practice of the National Association of Securities
Dealers, Inc.
2. Services and Responsibilities on a continuing Basis. The Adviser
will provide for the following shareholder services on a regular basis, which
shall be daily, weekly or as otherwise appropriate, unless otherwise specified
by the Funds:
<PAGE>
(a) responding to shareholder inquiries;
(b) processing purchases and redemptions of the Classes' shares,
including reinvestment of dividends;
(c) assisting shareholders in changing dividend options, account
designations and addresses;
(d) transmitting proxy statements, annual reports, prospectuses
and other correspondence from the Funds to shareholders
(including, upon request, copies, but not originals, of
regular correspondence, confirmations or regular statements of
account) where such shareholders hold shares of the Classes
registered in the name of the Adviser, a Service Provider, or
their nominees; and
(e) providing such other information and assistance to
shareholders as may be reasonably requested by such
shareholders.
The Adviser and the Service Providers are under no obligation to, and shall not
provide pursuant to the Plan any services with respect to the sale or
distribution of shares of the Classes.
3. Standard of Care. The Adviser and the Service Providers shall be
under no duty to take any action on behalf-of the Classes except as specifically
set forth herein or as may be specifically agreed to by the-Adviser or the
Service Providers with the Classes in writing. in the performance of the duties
hereunder, the Adviser and the Service Providers shall be obligated to exercise
due care and diligence and to act in good faith and to use their best efforts.
Without limiting the generality of the foregoing or of any other provision of
the Plan, neither the Adviser nor any Service Provider shall be liable for
delays or errors or loss of data occurring by reason of circumstances beyond the
Adviser's or the Service Provider's control.
4. Confidentiality. The Adviser agrees, on behalf of itself and its
employees, to treat confidentially all records and other information relative to
the Classes and the Trust, and all prior, present or potential shareholders of
the Classes, except after prior notification to, and approval of release of
information in writing by, the Classes, which approval shall not be unreasonably
withheld, and may not be withheld where the Adviser or a Service Provider may be
exposed to civil or criminal contempt proceedings for failure to comply, when
requested to divulge such information by duly constituted authorities, or when
so requested by the Funds.
5. Independent Contractor. The Adviser shall, for all purposes herein,
be deemed to be an independent contractor, and the Adviser and the Service
Providers shall, unless otherwise expressly provided and authorized to do so,
have no authority to act for or represent the Trust or the Classes in any way,
or in any way be deemed an agent for the Trust or for the Classes. It is
expressly understood and agreed that the services to be rendered by the Adviser
under the provisions of the Plan are not to be deemed exclusive, and the Adviser
shall be free to
2
<PAGE>
render similar or different services to others so long as its ability to render
the services provided for in the Plan shall not materially be impaired thereby.
6. Compensation. As compensation for the services rendered by, and
responsibilities assumed by, the Adviser during the term of the Plan, the
Classes will pay to the Adviser a service fee not to exceed one-quarter of one
percent (0.25%) per annum of the average daily net asset value of the Classes,
shares. The Adviser will collect such fee applicable to clients of the Service
Providers that furnish the shareholder services specified in section 2 above for
the separate account of each such Service Provider. The service fee shall be
accrued daily by the Classes and paid to the Adviser on a monthly basis.
7. Indemnification.
(a) The Funds agree to indemnify and hold harmless the Adviser
from all taxes, charges, expenses, assessments, claims and liabilities
(including without limitation, liabilities arising under the Securities Act of
1933, the Securities Exchange Act of 1934, the 1940 Act, and any state and
foreign securities laws, all as amended from time to time) and expenses,
including (without limitation) reasonable attorneys' fees and disbursements,
arising directly or indirectly from any action or thing which the Adviser takes
or does or omits to take or do (i) at the request or on the direction of or in
reliance on the advice of the Funds or (ii) upon oral or written instructions
from an officer of the Funds, provided that the Adviser shall not be indemnified
against any liability to the Funds or to the Funds' shareholders (or any
expenses incident to such liability) arising out of the Adviser's or any Service
Provider's own willful misfeasance, bad faith, negligence or reckless disregard
of its duties and obligations under the Plan. The Adviser agrees to indemnify
and hold harmless the Funds, the Trust and its officers and Trustees from all
claims and liabilities (including, without limitation, liabilities arising under
the Securities Act of 1933, the Securities Exchange Act of 1934, the 1940 Act,
and any state and foreign securities laws, all as amended from time to time) and
expenses, including (without limitation) reasonable attorneys' fees and
disbursements, arising directly or indirectly from any action or thing which the
Adviser or any Service Provider takes or does or omits to take or do which is in
violation of the Plan or not in accordance with instructions properly given by
an officer of the Trust or arising out of the Adviser's or the Service
Provider's own willful misfeasance, bad faith, negligence or reckless disregard
of the duties and obligations under the Plan.
(b) The Adviser shall provide such security as is necessary to
prevent unauthorized use of any on-line computer facilities. The Adviser agrees
to release, indemnify and hold harmless the Trust and the Funds from any and all
direct or indirect liabilities or losses resulting from requests, directions,
actions or inactions of or by the Adviser or any Service Provider, its officers,
employees or agents regarding the redemption, transfer or registration of the
Funds' shares for accounts of shareholders or the Service Provider, its clients
and other shareholders. Principals of the Adviser will be available to consult
from time to time with officers of the Trust and the Trustees concerning
performance of the services contemplated by the Plan.
3
<PAGE>
8. Funds Information. No person is authorized to make any
representations concerning the Funds, or shares of the Funds or shareholder
services except in accordance with the terms of the Plan. Neither the Adviser or
any service Provider, nor any of their respective agents will use or distribute,
or authorize the use or distribution of, any statements other than those
contained in the Classes' current Prospectus or Statement of Additional
Information or in such supplemental literature as may be authorized by the
Funds.
9. Duration and Termination. The Plan shall continue until termination
by the Classes or the Adviser on 60 days' written notice to the other. All
notices and other communications hereunder shall be in writing.
10. Amendments. The Plan or any part hereof may be changed or waived
only by an instrument in writing signed by the party against which enforcement
of such charge or waiver is sought.
11. Miscellaneous.
(a) The Plan embodies the entire agreement and understanding
between the parties hereto, and supersedes all prior agreements and
understandings, relating to the subject matter hereof.
(b) The captions in the Plan 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.
(c) The Plan shall be governed by and construed in accordance
with the laws of the State of California as applicable to contracts between
California residents entered into and to be performed entirely within
California.
(d) If any provision of the Plan shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the Plan shall
not be affected thereby.
(e) The Adviser acknowledges that it has received notice of
and accepts the limitations of the Funds' liability set forth in the Trust's
Agreement and Declaration of Trust. The Adviser agrees that the Funds'
obligations under the Plan shall be limited to the Funds and to its assets, and
that neither the Adviser nor any Service Provider shall seek satisfaction of any
such obligation from the shareholders of the Funds or from any trustee, officer,
employee or agent of the Trust or the Funds.
(f) The Plan shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors.
(g) The Plan may not be assigned without the mutual consent of
the parties.
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Plan to be
executed by their officers designated below on the day and year first above
written.
THE MONTGOMERY FUNDS
By: ________________________
Title: ________________________
MONTGOMERY ASSET MANAGEMENT, L.P.
By: ________________________
Title: ________________________
5
<PAGE>
EXHIBIT A
Funds Covered
by the Shareholder Services Plan
- --------------------------------------------- ----------------------------------
Fund Effective Date
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- --------------------------------------------- ----------------------------------
- --------------------------------------------- ----------------------------------
- --------------------------------------------- ----------------------------------
- --------------------------------------------- ----------------------------------
- --------------------------------------------- ----------------------------------
- --------------------------------------------- ----------------------------------
- --------------------------------------------- ----------------------------------
- --------------------------------------------- ----------------------------------
- --------------------------------------------- ----------------------------------
- --------------------------------------------- ----------------------------------
- --------------------------------------------- ----------------------------------
- --------------------------------------------- ----------------------------------
THE MONTGOMERY FUNDS II MONTGOMERY ASSET MANAGEMENT LLC
By: ___________________________ By: ___________________________
Title: ___________________________ Title: ___________________________
6
<PAGE>
- --------------------------------------------------------------------------------
Item 23 (i)
Opinion of Counsel as to
Legality of Shares
- --------------------------------------------------------------------------------
<PAGE>
Law Offices of
Paul, Hastings, Janofsky & Walker LLP
A Limited Liability Partnership Including Professional Corporations
345 California Street
San Francisco, California 94104-2635
Telephone (415) 835-1600
Facsimile (415) 217-5333
Internet www.phjw.com
October 26, 1998
Ms. Downey Hebble
Montgomery Asset Management, LLC
101 California Street
San Francisco, California 94111
Re: Montgomery Global Long-Short Fund, Montgomery Emerging Markets
Focus Fund, Montgomery Macro Cap Systematic Value Fund,
Montgomery Small Cap Systematic Value Fund, and Montgomery
Institutional Series: International Growth Portfolio
Ladies and Gentlemen:
We have acted as counsel to The Montgomery Funds II, a
Delaware business trust (the "Trust"), in connection with Post-Effective
Amendments to the Trust's Registration Statement filed on Form N-1A with the
Securities and Exchange Commission (the "Post-Effective Amendments") and
relating to the issuance by the Trust of an indefinite number of $0.01 par value
shares of beneficial interest (the "Shares") for five series of the Trust:
Montgomery Global Long-Short Fund, Montgomery Emerging Markets Focus Fund,
Montgomery Macro Cap Systematic Value Fund, Montgomery Small Cap Systematic
Value Fund and Montgomery Institutional Series: International Growth Portfolio
(each a "Fund" and collectively the "Funds").
In connection with this opinion, we have assumed the
authenticity of all records, documents and instruments submitted to us as
originals, the genuineness of all signatures, the legal capacity of all natural
persons, and the conformity to the originals of all records, documents, and
instruments submitted to us as copies. We have based our opinion on the
following:
(a) the Trust's Agreement and the Declaration of Trust dated
September 8, 1993, as amended on August 16, 1994 (the "Declaration of Trust").
The Declaration of Trust as amended has been in full force and effect from
September 8, 1993, through the date hereof;
<PAGE>
b) the Trust's Certificate of Trust as originally filed with the Secretary of
State of Delaware on September 10, 1993, and as amended on March 19, 1994 and
amended on November 11, 1995; and, the Amended and Restated Certificate of
Trust, as filed with the Secretary of State of Delaware on August 22, 1994 (the
"Certificate of Trust"). The Certificate of Trust, as amended, has been in full
effect from September 10, 1993 (or from the date of the relevant amendment),
through the date hereof;
(c) the Trust's By-laws dated September 8, 1993, as amended,
and restated on November 11, 1993 and August 16, 1994. The By-laws, as amended,
have been in full force and effect from September 8, 1993 through the date
hereof;
(d) resolutions of the Trustees of the Trust adopted at
meetings on: November 17, 1997, authorizing the establishment of the Global
Long-Short Fund and the Emerging Markets Focus Fund and the issuance of their
respective Shares; February 26, 1998, authorizing the establishment of the Small
Cap Systematic Value Fund and the Macro Cap Systematic Value Fund and the
issuance of their respective Shares; and, May 20, 1998, authorizing the
establishment of the Montgomery Institutional Series: International Growth
Portfolio and the issuance of its Shares;
(e) the respective Post-Effective Amendment for each series;
and
(f) a certificate of an officer of the Trust as to certain
factual matters relevant to this opinion.
Our opinion below is limited to the federal law of the United
States of America and the business trust law of the State of Delaware. We are
not licensed to practice law in the State of Delaware, and we have based our
opinion below solely on our review of Chapter 38 of Title 12 of the Delaware
Code and the case law interpreting such Chapter as reported in Delaware Code
Annotated (CSC The United States Corporation Company, April 1997) as updated on
Westlaw (an electronic database) on October 23, 1998. We have not undertaken a
review of other Delaware law or of any administrative or court decisions in
connection with rendering this opinion. We disclaim any opinion as to any law
other than that of the United States of America and the business trust law of
the State of Delaware as described above, and we disclaim any opinion as to any
statute, rule, regulation, ordinance, order or other promulgation of any
regional or local governmental authority.
Based on the foregoing and our examination of such questions
of law as we have deemed necessary and appropriate for the purpose of this
opinion, and assuming that (i) all of the Shares will be issued and sold for
cash at the per-share public offering price on the date of their
<PAGE>
issuance in accordance with statements in the Trust's Prospectus included in the
Post-Effective Amendments and in issuance in accordance with statements in the
Trust's Prospectus included in the Post-Effective Amendments and in accordance
with the Declaration of Trust, (ii) all consideration for the Shares will be
actually received by the Trust, and (iii) all applicable securities laws will be
complied with, it is our opinion that, when issued and sold by the Trust, the
Shares will be legally issued, fully paid and nonassessable.
This opinion is rendered to you in connection with the
Post-Effective Amendments and is solely for your benefit. This opinion may not
be relied upon by you for any other purpose or relied upon by any other person,
firm, corporation or other entity for any purpose, without our prior written
consent. We disclaim any obligation to advise you of any developments in areas
covered by this opinion that occur after the date of this opinion.
We hereby consent to (i) the reference to our firm as Legal Counsel in
the Prospectus included in the applicable Post-Effective Amendments, and (ii)
the filing of this opinion as an exhibit to those Post-Effective Amendments.
Very truly yours,
Paul, Hastings, Janofsky & Walker LLP
<PAGE>
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Item 23 (l)
Initial Capital Agreements:
Form of Subscription Agreement
Re: Initial Shares
- --------------------------------------------------------------------------------
<PAGE>
FORM OF SUBSCRIPTION AGREEMENT
The Montgomery Funds II
101 California Street
San Francisco, California 94111
Ladies and Gentlemen:
The undersigned hereby subscribes for the purchase of shares of beneficial
interest (the "Shares") of ____________________________ (the "Fund"), a separate
series of The Montgomery Funds II (the "Trust"), at $10.00 per share for a total
investment of ___________. In connection with said subscription, the undersigned
hereby represents that:
1. There is no present reason to anticipate any change in circumstances
or any other occasion or event that would cause the undersigned to sell or
redeem the Shares shortly after the purchase thereof.
2. There are no agreements or arrangements between the undersigned and
the Trust, or any of its officers, trustees, employees or the investment manager
of the Fund, or any affiliated persons thereof with respect to the resale,
future distribution or redemption of the Shares.
3. The sale of the Shares by the undersigned will be made only by
redemption to the Fund and not by a transfer to any third party, without the
consent of the Trust.
4. The undersigned is aware that in issuing and selling these Shares,
the Fund and the Trust are relying upon the aforementioned representations.
5. The undersigned is fully aware that the organizational expenses of
the Fund, including the costs and expenses of registration of the Shares, are
being charged to the operations of the Fund over a period of five years, and
that if the undersigned redeems any portion of these Shares before the end of
said amortization period, the undersigned will reimburse the Fund for the pro
rata share of the unamortized organizational expenses (by a reduction of the
redemption proceeds) in the same proportion as the number of Shares being
redeemed bears to the total number of remaining initial Shares acquired by the
undersigned hereunder.
Dated: _____________________________ By: _____________________________
<PAGE>
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Item 23 (o)
18f-3 Plan - Form of
Multiple Class Plan
- --------------------------------------------------------------------------------
<PAGE>
FORM OF
MULTIPLE CLASS PLAN
OF
THE MONTGOMERY FUNDS II
This Multiple Class Plan (this "Plan") is required by Securities and
Exchange Commission Rule 18f-3 promulgated under the Investment Company Act of
1940 (the "1940 Act").
This Plan shall govern the terms and conditions under which The
Montgomery Funds II (the "Trust") may issue separate classes of shares
representing interests in the series of the Trust (the "Funds") listed on
A1212endix A. To the extent that a subject matter herein is covered by the
Trust's Agreement and Declaration of Trust or Bylaws, the Agreement and
Declaration of Trust and Bylaws will control in the event of any inconsistencies
with the descriptions herein.
SECTION 1. Rights and Obligations. Except as set forth herein, all
classes of shares issued by a Fund shall have identical voting, dividend,
liquidation and other rights, preferences, powers, restrictions, limitations,
qualifications, designations, and terms and conditions. The only differences
among the various classes of shares relate solely to the following: (a) each
class may be subject to different class expenses as discussed under Section 3 of
this Plan; (b) each class may bear a different identifying designation; (c) each
class has exclusive voting rights with respect to matters solely affecting such
class (except as set forth in Section 6 below); (d) each class may have
different exchange privileges; and (e) each class may provide for the automatic
conversion of that class into another class.
SECTION 2. Classes of Shares and Designation Thereof. Each Fund may
offer any or all of the following classes of shares:
(a) Class R Shares. "Class R Shares" will be sold at their net
asset value without the imposition of a front-end sales load or
contingent deferred sales charge ("CDSC"). Class R Shares will not be
subject to a Rule 12b-1 distribution fee and will not be subject to a
shareholder service fee.
(b) Class P Shares. "Class P Shares" will be sold at their net
asset value without the imposition of a front-end sales load or CDSC.
Class P Shares will be subject to a Rule 12b-1
distribution fee at an annual rate of up to 0.25 percent of the daily
net assets attributable to the Class P Shares. Class P shares will not
be subject to a shareholder service fee.
The current "Share Marketing Plan" for The Montgomery Funds
and The Montgomery Funds 11 shall be applicable to the Class P Shares.
<PAGE>
The Class P Shares may be offered only to one or more of the
following categories of investors: (1) unaffiliated benefit plans such
as qualified retirement plans, other than individual retirement
accounts and self-employed retirement plans, with total assets in
excess of $10 million or such other amounts as a Fund may establish and
with such other characteristics as a Fund may establish, provided that
any such unaffiliated benefit plans have a separate trustee who is
vested with investment discretion as to plan assets, has limitations on
the ability of plan beneficiaries to access their plan investments
without incurring adverse tax consequences, and will not include
self-directed plans; (2) tax-exempt retirement plans of Montgomery
Asset Management, L.L.C. (the "Manager"), or its affiliates, consisting
of qualified defined contribution plans maintained pursuant to Section
401 (a) of the Internal Revenue Code of 1986 (the "Code"), as amended,
under which assets will be held in trust by a trustee and as to which
employees will have limited pre-retirement access to assets; (3) banks
and insurance companies that are not affiliated with the Manager
purchasing for their own account; (4) investment companies not
affiliated with the Manager or the Distributor; (5) endowment funds or
non-profit organizations that are not affiliated with the Manager; (6)
corporations, foundations and financial institutions; and (7) financial
advisers and financial intermediaries that provide services to
shareholders.
(c) Class L Shares. The "Class L Shares" will be sold at their
net asset value without the imposition of a front-end sales load or
CDSC.
Class L Shares will be subject to a Rule 12b-1 distribution
fee at an annual rate of up to 0.75 percent of the daily net assets
attributable to the Class L Shares. Class L Shares also may be subject
to a shareholder service fee at an annual rate of up to 0.25 percent of
the of the daily net assets attributable to the Class L Shares. All or
any portion of that service fee is payable to financial intermediaries
having agreements with the Distributor, the Trust or a Fund for the
provision of continuing shareholder services to such financial
intermediaries' customers who own Class L Shares.
The current "Share Marketing Plan" for The Montgomery Funds
and The Montgomery Funds II shall be applicable to the Class L Shares.
SECTION 3. Allocation of Expenses.
(a) Class Expenses. Each class of shares may be subject to
different class expenses consisting of. (1) Rule 12b-1 plan
distribution fees and shareholder service fees, if applicable to a
particular class; (2) transfer agency and other recordkeeping costs to
the extent allocated to a particular class; (3) Securities and Exchange
Commission ("SEC") and blue sky registration fees incurred separately
by a particular class; (4) litigation or other legal expenses relating
solely to a particular class; (5) printing and postage expenses related
to the preparation and distribution of class specific materials such as
shareholder reports, prospectuses and proxies to shareholders of a
particular class; (6) expenses of administrative personnel and services
as required to support the shareholders of a particular class; (7)
audit or accounting fees or expenses relating
2
<PAGE>
solely to a particular class; (8) director fees and expenses incurred
as a result of issues relating solely to a particular class and (9) any
other expenses subsequently identified that should be properly
allocated to a particular class, which shall be approved by the Board
of Trustees (collectively, "Class Expenses").
(b) Other Expenses. Except for the Class Expenses discussed
above (which will be allocated to the appropriate class), all expenses
incurred by each Fund will be allocated to each class of shares on the
basis of the net asset value of each class to the net asset value of
the Trust or the Fund, as the case may be.
(c) Waivers and Reimbursements of Expenses. The Manager and
any provider of services to the Funds may waive or reimburse the
expenses of a particular class or classes, provided, however, that such
waiver shall not result in cross-subsidization between classes.
SECTION 4. Allocation of Income. The Funds will allocate income and
realized and unrealized capital gains and losses based on the relative net
assets of each class of shares.
SECTION 5. Exchange Privileges. A class of shares of a Fund may be
exchanged only for the same class of shares of another Fund. All exchanges will
be subject to such conditions as may be imposed from time to time as disclosed
in Appendix B.
SECTION 6. Conversions. Each Class P Share and Class L Share shall
convert automatically to a Class R Share upon that Class P Share's or Class L
Share's having been subject to the cumulative maximum permitted Rule 12b-1 fees
under the applicable limitations of the National Association of Securities
Dealers, Inc. The conversion of such share shall be effected on the basis of net
asset value without the imposition of a front-end sales loan, CDSC or other
charge. In no event will a class of shares automatically convert into shares of
a class with a distribution arrangement that could be viewed as less favorable
to the shareholder as measured by overall cost.
The implementation of this conversion feature is subject to the
continuing availability of a ruling of the Internal Revenue Service, or of an
opinion of counsel or tax adviser, stating that the conversion of one class of
shares to another does not constitute a taxable event under federal income tax
law. The conversion feature may be suspended if such a ruling or opinion is not
available.
SECTION 7. Effective When Approved. This Plan shall not take effect
until a majority of the trustees of the Trust, including a majority of the
trustees who are not interested persons of the Trust, find that the Plan, as
proposed and including the expense allocations, is in the best interests of each
class individually and the Trust as a whole.
SECTION 8. Amendments. This Plan may not be amended to materially
change the provisions of this Plan unless such amendment is approved in the
manner specified in Section 7 above.
3
<PAGE>
APPENDIX A TO
MULTIPLE CLASS PLAN
OF
THE MONTGOMERY FUNDS II
4
<PAGE>
APPENDIX B TO
MULTIPLE CLASS PLAN
OF
THE MONTGOMERY FUNDS II
EXCHANGE PRIVILEGES
SECTION 1. TERMS AND CONDITIONS OF EXCHANGES. Shareholders of the Funds
discussed herein may participate in exchanges as described below.
An exchange is permitted only in the following circumstances:
(a) if the Funds offer more than one class of shares, the exchange must
be between the same class of shares (e.g., Class R and Class P shares of a Fund
cannot be exchanged for each other);
(b) the dollar amount of the exchange must be at least equal to the
minimum investment applicable to the shares of the Fund acquired through such
exchange;
(c) the shares of the Fund acquired through exchange must be qualified
for sale in the state in which the shareholder resides;
(d) the exchange must be made between accounts having identical
registrations and addresses;
(e) the full amount of the purchase price for the shares being
exchanged must have already been received by the Fund;
(f) the account from which shares have been exchanged must be coded as
having a certified taxpayer identification number on file or, in the
alternative, an appropriate IRS Form W-8 (certificate of foreign status) or Form
W-9 (certifying exempt status) must have been received b the Fund;
(g) newly acquired shares (through either an initial or subsequent
investment) are held in an account for at least ten days, and all other shares
are held in an account for at least one day, prior to the exchange; and
(h) certificates representing shares must be returned before shares can
be exchanged;
(i) Because excessive exchanges can harm a Fund's performance, the
Funds reserve the right to terminate, either temporarily or permanently,
exchange privileges of any shareholder who makes more than four exchanges out of
any one Fund during a twelve-month period and to refuse an exchange into a Fund
from which a shareholder
5
<PAGE>
has redeemed shares within the previous 90 days (accounts under common ownership
or control and accounts with the same taxpayer identification number will be
counted together. Exchanges out of the fixed income Funds are exempt. This limit
may be modified for accounts in certain institutional retirement plans to
conform to plan exchange limits and U.S. Department of Labor regulations (for
those limits, see plan materials). The Funds reserve, the right to refuse
exchanges by any person or group if, in the Manager's judgment, a Fund would be
unable effectively to invest the money in accordance with its investment
objective and policies, or would otherwise be potentially adversely affected. A
shareholder's exchanges may be restricted or refused if a Fund receives, or the
Manager anticipates, simultaneous orders affecting significant portions of that
Fund's assets and, in particular, a pattern of exchanges coinciding with a
"market timing" strategy. Although the Funds attempt to provide prior notice to
affected shareholders when it is reasonable to do so, they may impose these
restrictions at any time. The Funds reserve the right to terminate or modify the
exchange privileges of Fund shareholders in the future.
THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO-PURCHASE SHARE, S
BUT IS PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND
MAY BE MODIFIED OR DISCONTINUED BY ANY SUCH FUNDS OR BY THE MANAGER OR
DISTRIBUTOR AT ANY TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT
NOTICE.
Shares to be exchanged will be redeemed at their net asset value as
determined at the close of business on the day that an exchange request in
proper form (described below) is received, as described in the applicable
prospectus. Exchange requests received after the required time will result in
the redemption of shares at their net asset value as determined at the close of
business on the next business day.
In the event of unusual market conditions, a Fund reserves the right to
reject any exchange request if, in the judgment of the Manager, the number of
requests or the total value of the shares that are the subject of the exchange
places a material burden on a Fund. For example, the number of exchanges by
investment managers making market timing exchanges may be limited.
SECTION 2. FEES. There is no fee for exchanges among the Funds.
SEE THE APPLICABLE PROSPECTUS FOR MORE INFORMATION ABOUT SHARE
EXCHANGES.
6
