Florida Daily Municipal Income Fund
DECLARATION OF TRUST
August 31, 1994
TABLE OF CONTENTS
Page
ARTICLE I -- Name and Definitions............................................2
Section 1.1 Name......................................................2
Section 1.2 Definitions...............................................2
ARTICLE II -- Trustees........................................................5
Section 2.1 General Powers............................................5
Section 2.2 Investments...............................................6
Section 2.3 Legal Title...............................................10
Section 2.4 Issuance and Repurchase
of Shares................................................10
Section 2.5 Delegation; Committees....................................11
Section 2.6 Collection and Payment....................................11
Section 2.7 Expenses..................................................12
Section 2.8 Manner of Acting; By-Laws.................................12
Section 2.9 Miscellaneous Powers......................................13
Section 2.10 Principal Transactions....................................14
Section 2.11 Number of Trustees........................................15
Section 2.12 Election and Term.........................................15
Section 2.13 Resignation and Removal...................................15
Section 2.14 Vacancies.................................................16
Section 2.15 Delegation of Power to Other
Trustees.................................................18
ARTICLE III -- Contracts......................................................18
Section 3.1 Distribution Contract.....................................18
Section 3.2 Advisory or Management Contract...........................19
Section 3.3 Affiliations of Trustees or
Officers, Etc..........................................19
Section 3.4 Compliance with 1940 Act..................................20
ARTICLE IV -- Limitations of Liability of Shareholders,
Trustees and Others.........................................21
Section 4.1 No Personal Liability of Shareholders,
Trustees, Etc............................................21
Section 4.2 Non-Liability of Trustees, Etc............................22
Section 4.3 Mandatory Indemnification.................................23
Section 4.4 No Bond Required of Trustees..............................26
Section 4.5 No Duty of Investigation; Notice in
Trust Instruments, Etc...................................26
Section 4.6 Reliance on Experts, Etc..................................27
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ARTICLE V -- Shares of Beneficial Interest....................................28
Section 5.1 Beneficial Interest.....................................28
Section 5.2 Rights of Shareholders..................................28
Section 5.3 Trust Only..............................................29
Section 5.4 Issuance of Shares......................................29
Section 5.5 Register of Shares......................................30
Section 5.6 Transfer of Shares......................................31
Section 5.7 Notices; Reports .......................................32
Section 5.8 Treasury Shares.........................................33
Section 5.9 Voting Powers...........................................33
Section 5.10 Meetings of Shareholders................................34
Section 5.11 Series Designation......................................35
Section 5.12 Class Designation.......................................39
Section 5.13 Assent to Declaration of Trust..........................41
ARTICLE VI -- Redemption and Repurchase of Shares.............................42
Section 6.1 Redemption of Shares...................................42
Section 6.2 Price..................................................42
Section 6.3 Payment................................................43
Section 6.4 Effect of Suspension of
Determination of Net Asset
Value.................................................43
Section 6.5 Repurchase by Agreement................................44
Section 6.6 Redemption of Shareholder's
Interest..............................................44
Section 6.7 Reductions in Number of
Outstanding Shares Pursuant
to Net Asset Value Formula............................45
Section 6.8 Suspension of Right of
Redemption............................................45
ARTICLE VII -- Determination of Net Asset Value, Net
Income and Distributions...................................46
Section 7.1 Net Asset Value........................................46
Section 7.2 Distributions to Shareholders..........................48
Section 7.3 Determination of Net Income; Constant Net
Asset Value; Reduction of Outstanding
Shares................................................49
Section 7.4 Allocation Between Principal
and Income............................................51
Section 7.5 Power to Modify Foregoing
Procedures...........................................51
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ARTICLE VIII -- Duration, Termination of Trust;
Amendment; Mergers, Etc...................................52
Section 8.1 Duration..............................................52
Section 8.2 Termination of Trust or Series
of the Trust.........................................52
Section 8.3 Amendment Procedure .................................54
Section 8.4 Merger, Consolidation and Sale of Assets..............56
Section 8.5 Incorporation ........................................56
ARTICLE IX -- Reports to Shareholders.........................................58
ARTICLE X -- Miscellaneous....................................................58
Section 10.1 Filing................................................58
Section 10.2 Governing Law.........................................59
Section 10.3 Counterparts..........................................59
Section 10.4 Reliance by Third Parties.............................59
Section 10.5 Provisions in Conflict with Law
or Regulations.......................................60
Section 10.6 Principal Place of Business...........................61
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DECLARATION OF TRUST
OF
Florida Daily Municipal Income Fund
DATED August 31, 1994
DECLARATION OF TRUST made August 31, 1994;
WHEREAS, the Trustees desire to establish a trust for the investment and
reinvestment of funds contributed thereto; and
WHEREAS, the Trustees desire that the beneficial interest in the trust
assets be divided into transferable shares of beneficial interest, as
hereinafter provided;
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust established hereunder shall be held and managed in
trust for the benefit of the holders, from time to time, of the shares of
beneficial interest issued hereunder and subject to the provisions hereof.
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ARTICLE I
NAME AND DEFINITIONS
Section 1.1. Name. The name of the trust created hereby, until and unless
changed by the Trustees as provided in Section 8.3(a) hereof, is the
"Florida Daily Municipal Income Fund."
Section 1.2. Definitions. Wherever they are used herein, the following
terms have the following respective meanings:
(a) "By-laws" means the By-laws referred to in Section 2.8 hereof, as from
time to time amended.
(b) "Class" means the two or more classes as may be established and
designated from time to time by the Trustees pursuant to Section 5.12 hereof.
(c) The terms "Commission" and "Interested Person," have the meanings given
them in the 1940 Act. Except as otherwise defined by the Trustees in conjunction
with the establishment of any series of Shares, the term "vote of a majority of
the Shares outstanding and entitled to vote" shall
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have the same meaning as the term "vote of a majority of the outstanding voting
securities" given it in the 1940 Act.
(d) "Custodian" means any Person other than the Trust who has custody of
any Trust Property as required by ss. 17(f) of the 1940 Act, but does not
include a system for the central handling of securities described in said ss.
17(f).
(e) "Declaration" means this Declaration of Trust as amended from time to
time. Reference in this Declaration of Trust to "Declaration", "hereof" and
"hereunder" shall be deemed to refer to this Declaration rather than exclusively
to the article or section in which such words appear.
(f) "Distributor" means the party, other than the Trust, to the contract
described in Section 3.1 hereof.
(g) "His" shall include the feminine and neuter, as well as the masculine,
genders.
(h) The "1940 Act" means the Investment Company Act of 1940, as amended
from time to time.
(i) "Person" means and includes individuals, corporations, partnerships,
trusts, associations, joint ventures
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and other entities, whether or not legal entities, and governments and agencies
and political subdivisions thereof.
(j) "Series" individually or collectively means the two or more series as
may be established and designated from time to time by the Trustees pursuant to
Section 5.11 hereof. Unless the context otherwise requires, the term "series"
shall include classes into which shares of the Trust, or of a series, may be
divided from time to time.
(k) "Shareholder" means a record owner of Outstanding Shares.
(l) "Shares" means the equal proportionate units of interest into which the
beneficial interest in the Trust shall be divided from time to time, including
the Shares of any and all series and classes which may be established by the
Trustees, and includes fractions of Shares as well as whole Shares.
"Outstanding" Shares means those Shares shown from time to time on the books of
the Trust or its Transfer Agent as then issued and outstanding, but shall not
include Shares which have been redeemed or repurchased by the Trust and which
are at the time held in the Treasury of the Trust.
(m) "Transfer Agent" means any Person other than the Trust who maintains
the Shareholder records of the Trust,
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such as the list of Shareholders, the number of Shares credited to each account,
and the like.
(n) The "Trust" means the Florida Daily Municipal Income Fund.
(o) The "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account of the
Trust or the Trustees.
(p) The "Trustees" means the Person who has signed this Declaration, so
long as he shall continue in office in accordance with the terms hereof, and all
other Persons who may from time to time be duly elected, qualified and serving
as Trustees in accordance with the provisions of Article II hereof, and
reference herein to a Trustee or the Trustees shall refer to such Person or
Persons in this capacity or their capacities as trustees hereunder.
ARTICLE II
TRUSTEES
Section 2.1 General Powers. The Trustees shall have exclusive and absolute
control over the Trust Property and over the business of the Trust to the same
extent as if the Trustees were the sole owners of the Trust Property and
business in their
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own right, but with such powers of delegation as may be permitted by this
Declaration. The Trustees shall have power to conduct the business of the Trust
and carry on its operations in any and all of its branches and maintain offices
both within and without the Commonwealth of Massachusetts, in any and all states
of the United States of America, in the District of Columbia, and in any and all
commonwealths, territories, dependencies, colonies, possessions, agencies or
instrumentalities of the United States of America and of foreign governments,
and to do all such other things and execute all such instruments as they may
deem necessary, proper or desirable in order to promote the interests of the
Trust although such things are not herein specifically mentioned. Any
determination as to what is in the interests of the Trust made by the Trustees
in good faith shall be conclusive. In construing the provisions of this
Declaration, the presumption shall be in favor of a grant of power to the
Trustees.
The enumeration of any specific power herein shall not be construed as
limiting the aforesaid power. Such powers of the Trustees may be executed
without order of or resort to any court.
Section 2.2 Investments. The Trustees shall have the power:
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(a) To operate as and carry on the business of an investment company, and
exercise all the powers necessary and appropriate to the conduct of such
operations.
(b) To invest in, hold for investment, or reinvest in, securities,
including common and preferred stocks; warrants; bonds; debentures; bills; time
notes and all other evidences of indebtedness; negotiable or non-negotiable
instruments; government securities, including securities of any state,
municipality or other political subdivision, or any governmental or
quasi-governmental agency or instrumentality; and money market instruments
including bank certificates of deposit, finance paper, commercial paper,
bankers' acceptances and all kinds of repurchase agreements, of any corporation,
company, trust, association, firm or other business organization however
established, and of any country, state, municipality or other political
subdivisions, or any governmental or quasi-governmental agency or
instrumentality.
(c) To acquire (by purchase, subscription or otherwise), to hold, to trade
in and deal in, to acquire or write any rights or options to purchase or sell,
to sell or otherwise dispose of, to lend, and to pledge any such securities and
repurchase agreements.
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(d) To exercise all rights, powers and privileges of ownership or interest
in all securities and repurchase agreements included in the Trust Property,
including the right to vote thereon and otherwise act with respect thereto and
to do all acts for the preservation, protection, improvements and enhancement in
value of all such securities and repurchase agreements.
(e) To acquire (by purchase, lease or otherwise) and to hold, use,
maintain, develop and dispose of (by sale or otherwise) any property, real or
personal, including cash, and any interest therein.
(f) To borrow money and in this connection issue notes or other evidence of
indebtedness; to secure borrowings by mortgaging, pledging or otherwise
subjecting as security the Trust Property; to endorse, guarantee, or undertake
the performance of any obligation or engagement of any other Person and to lend
Trust Property.
(g) To aid by further investment any corporation, company, trust,
association or firm, any obligation of or interest in which is included in the
Trust Property or in the affairs of which the Trustees have any direct or
indirect interest; to do all acts and things designed to protect, preserve,
improve or enhance the value of such obligation or
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interest; to guarantee or become surety on any or all of the contracts, stocks,
bonds, notes, debentures and other obligations of any such corporation, company,
trust, association or firm.
(h) To enter into a plan of distribution and any related agreements whereby
the Trust may finance directly or indirectly any activity which is primarily
intended to result in the sale of Shares.
(i) In general to carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything necessary, suitable
or proper for the accomplishment of any purpose or the attainment of any object
or the furtherance of any power hereinbefore set forth, either alone or in
association with others, and to do every other act or thing incidental or
appurtenant to or growing out of or connected with the aforesaid business or
purposes, objects or powers.
The foregoing clauses shall be construed both as objects and powers, and
the foregoing enumeration of specific powers shall not be held to limit or
restrict in any manner the general powers of the Trustees.
The Trustees shall not be limited to investing in obligations maturing
before the possible termination of the
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Trust, nor shall the Trustees be limited by any law limiting the
investments which may be made by fiduciaries.
Section 2.3 Legal Title. Legal title to all the Trust Property, including
the property of any series of the Trust, shall be vested in the Trustees as
joint tenants except that the Trustees shall have power to cause legal title to
any Trust Property to be held by or in the name of one or more of the Trustees,
or in the name of the Trust, or in the name of any other Person as nominee, on
such terms as the Trustees may determine, provided that the interest of the
Trust therein is deemed appropriately protected. The right, title and interest
of the Trustees in the Trust Property and the property of each series of the
Trust shall vest automatically in each Person who may hereafter become a
Trustee. Upon the termination of the term of office, resignation, removal or
death of a Trustee he shall automatically cease to have any right, title or
interest in any of the Trust Property or the property of any series of the
Trust, and the right, title and interest of such Trustee in all such property
shall vest automatically in the remaining Trustees. Such vesting and cessation
of title shall be effective whether or not conveying documents have been
executed and delivered.
Section 2.4 Issuance and Repurchase of Shares. The Trustees shall have the
power to issue, sell, repurchase, redeem, retire, cancel, acquire, hold, resell,
reissue, dispose of,
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transfer, and otherwise deal in Shares and, subject to the provisions set forth
in Articles VI and VII and Section 5.11 hereof, to apply to any such repurchase,
redemption, retirement, cancellation or acquisition of Shares any funds or
property of the particular series of the Trust with respect to which such Shares
are issued, whether capital or surplus or otherwise, to the full extent now or
hereafter permitted by the laws of the Commonwealth of Massachusetts governing
business corporations.
Section 2.5. Delegation; Committees. The Trustees shall have
power to delegate from time to time to such of their number or to officers,
employees or agents of the Trust the doing of such things and the execution of
such instruments either in the name of the Trust or the names of the Trustees or
otherwise as the Trustees may deem expedient, to the same extent as such
delegation is permitted by the 1940 Act.
Section 2.6. Collection and Payment. The Trustees shall have power to
collect all property due to the Trust; to pay all claims, including taxes,
against the Trust Property; to prosecute, defend, compromise or abandon any
claims relating to the Trust Property; to foreclose any security interest
securing any obligations, by virtue of which any property interest securing any
obligations, by virtue of which any property is owed to the Trust; and to enter
into releases, agreements and other instruments.
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Section 2.7. Expenses. The Trustees shall have the power to incur and pay
any expenses which in the opinion of the Trustees are necessary or incidental to
carry out any of the purposes of this Declaration, and to pay reasonable
compensation from the funds of the Trust to themselves as Trustees. The Trustees
shall fix the compensation of all officers, employees and Trustees.
Section 2.8. Manner of Acting; By-Laws. Except as otherwise provided herein
or in the By-Laws, any action to be taken by the Trustees may be taken by a
majority of the Trustees present at a meeting of Trustees (a quorum being
present), including any meeting held by means of a conference telephone circuit
or similar communications equipment by means of which all persons participating
in the meeting can hear each other, or by written consents of the entire number
of Trustees then in office. The Trustees may adopt By-laws not consistent with
this Declaration to provide for the conduct of the business of the Trust and may
amend or repeal such By-laws to the extent such power is not reserved to the
Shareholders.
Notwithstanding the foregoing provisions of this Section 2.8 and in
addition to such provisions or any other provision of this Declaration or of the
By-laws, the Trustees may by resolution appoint a committee consisting of less
than the whole number of Trustees then in office, which committee may be
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empowered to act for and bind the Trustees and the Trust, as if the acts of such
committee were the acts of all the Trustees then in office, with respect to the
institution, prosecution, dismissal, settlement, review or investigation of any
action, suit or proceeding which shall be pending or threatened to be brought
before any court, administrative agency or other adjudicatory body.
Section 2.9 Miscellaneous Powers. The Trustees shall have the power to: (a)
employ or contract with such Persons as the Trustees may deem desirable for the
transaction of the business of the Trust; (b) enter into joint ventures,
partnerships and any other combinations or associations; (c) remove Trustees or
fill vacancies in or add to their number, elect and remove such officers and
appoint and terminate such agents or employees as they consider appropriate, and
appoint from their own number, and terminate, any one or more committees which
may exercise some or all of the power and authority of the Trustees as the
Trustees may determine; (d) purchase, and pay for out of Trust Property,
insurance policies insuring the Shareholders, Trustees, officers, employees,
agents, investment advisers, distributors, selected dealers or independent
contractors of the Trust against all claims arising by reason of holding any
such position or by reason of any action taken or omitted by any such Person in
such capacity, whether or not constituting negligence, or whether or not the
Trust would have
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the power to indemnify such Person against such liability; (e) establish
pension, profit-sharing, Share purchase, and other retirement, incentive and
benefit plans for any Trustees, officers, employees and agents of the Trust; (f)
to the extent permitted by law, indemnify any person with whom the Trust has
dealings, including the Investment Adviser, Distributor, Transfer Agent and
selected dealers, to such extent as the Trustees shall determine; (g) guarantee
indebtedness or contractual obligations of others; (h) determine and change the
fiscal year of the Trust and the method by which its accounts shall be kept; and
(i) adopt a seal for the Trust, but the absence of such seal shall not impair
the validity of any instrument executed on behalf of the Trust.
Section 2.10. Principal Transactions. Except in transactions not permitted
by the 1940 Act or rules and regulations adopted by the Commission, the Trustees
may, on behalf of the Trust, buy any securities from or sell any securities to,
or lend any assets of the Trust to, any Trustee or officer of the Trust or any
firm of which any such Trustee or officer is a member acting as principal, or
have any such dealings with the Investment Adviser, Distributor or Transfer
Agent or with any Interested Person of such Person; and the Trust may employ any
such Person, or firm or company in which such Person is an Interested Person, as
broker, legal counsel,
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registrar, transfer agent, dividend disbursing agent or custodian upon customary
terms.
Section 2.11. Number of Trustees. The number of Trustees shall initially be
two (2), and thereafter shall be such number as shall be fixed from time to time
by a written instrument signed by a majority of the Trustees, provided, however,
that the number of Trustees shall in no event be less than one (1) nor more than
fifteen (15).
Section 2.12. Election and Term. Except for the Trustees named herein,
designated by such Trustees prior to the issuance of Shares, or appointed to
fill vacancies pursuant to Section 2.14 hereof, the Trustees shall be elected by
the Shareholders owning of record a plurality of the Shares voting at a meeting
of Shareholders called for that purpose. Except in the event of resignation or
removal pursuant to Section 2.13 hereof, each Trustee shall hold office until
the next such meeting of Shareholders and until his successor is duly elected
and qualified.
Section 2.13. Resignation and Removal. Any Trustee may resign his trust
(without need for prior or subsequent accounting) by an instrument in writing
signed by him and delivered to the other Trustees and such resignation shall be
effective upon such delivery, or at a later date according to the
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terms of the instrument. Any of the Trustees may be removed (provided the
aggregate number of Trustees after such removal shall not be less than one) with
cause, by the action of two-thirds of the remaining Trustees. Any Trustee may be
removed at any meeting of Shareholders by vote of two-thirds of the Outstanding
Shares. The Trustees shall promptly call a meeting of the Shareholders for the
purpose of voting upon the question of removal of any such Trustee or Trustees
when requested in writing so to do by the holders of not less than ten percent
of the Outstanding Shares and, in that connection, the Trustees will assist
shareholder communications to the extent provided for in Section 16(c) under the
1940 Act. Upon the resignation or removal of a Trustee, or his otherwise ceasing
to be a Trustee, he shall execute and deliver such documents as the remaining
Trustees shall require for the purpose of conveying to the Trust or the
remaining Trustees any Trust Property or property of any series of the Trust
held in the name of the resigning or removed Trustee. Upon the incapacity or
death of any Trustee, his legal representative shall execute and deliver on his
behalf such documents as the remaining Trustee shall require as provided in the
preceding sentence.
Section 2.14. Vacancies. The term of office of a Trustee shall terminate
and a vacancy shall occur in the event of the death, resignation, removal,
bankruptcy, adjudicated incompetence or other incapacity to perform the duties
of the
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office of a Trustee. No such vacancy shall operate to annul the
Declaration or to revoke any existing vacancy, including a vacancy existing by
reason of an increase in the number of Trustees. Subject to the provisions of
Section 16(a) of the 1940 Act, the remaining Trustees shall fill such vacancy by
the appointment of such other person as they in their discretion shall see fit,
made by a written instrument signed by a majority of the Trustees then in
office. Any such appointment shall not become effective, however, until the
person named in the written instrument of appointment shall have accepted in
writing such appointment and agreed in writing to be bound by the terms of the
Declaration. An appointment of a Trustee may be made in anticipation of a
vacancy to occur at a later date by reason of retirement, resignation or
increase in the number of Trustees, provided that such appointment shall not
become effective prior to such retirement, resignation or increase in the number
of Trustees. Whenever a vacancy in the number of Trustees shall occur, until
such vacancy is filled as provided in this Section 2.14, the Trustees in office,
regardless of their number, shall have all the powers granted to the Trustees
and shall discharge all the duties imposed upon the Trustees by the Declaration.
A written instrument certifying the existence of such vacancy signed by a
majority of the Trustees in office shall be conclusive evidence of the existence
of such vacancy.
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Section 2.15. Delegation of Power to Other Trustees. Any Trustee may, by
power of attorney, delegate his power for a period not exceeding six (6) months
at any one time to any other Trustee or Trustees; provided that in no case shall
less than two (2) Trustees personally exercise the powers granted to the
Trustees under this Declaration, except as herein otherwise expressly provided.
ARTICLE III
CONTRACTS
Section 3.1. Distribution Contract. The Trustees may in their discretion
from time to time enter into an exclusive or non-exclusive underwriting contract
or contracts providing for the sale of the Shares at a price based on the net
asset value of a Share, whereby the Trustees may either agree to sell the Shares
to the other party to the contract or appoint such other party their sales agent
for the Shares, and in either case on such terms and conditions as may be
prescribed in the By-laws, if any, and such further terms and conditions as the
Trustees may in their discretion determine not inconsistent with the provisions
of this Article III or of the By-laws; and such contract may also provide for
the repurchase of the Shares by such other party as agent of the Trustees.
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Section 3.2. Advisory or Management Contract. The Trustees may in their
discretion from time to time enter into an investment advisory or management
contract or separate contracts with respect to one or more series of the Trust
whereby the other party to such contract shall undertake to furnish to the Trust
such management, investment advisory, statistical and research facilities and
services and such other facilities and services, if any, and all upon such terms
and conditions as the Trustees may in their discretion determine, including the
grant of authority to such other party to determine what securities shall be
purchased or sold by the Trust and what portion of its assets shall be
uninvested, which authority shall include the power to make changes in the
Trust's investments.
The Trustees may also employ, or authorize the Trust's investment adviser
to employ, one or more sub-advisers from time to time to perform such of the
acts and services of the investment adviser and upon such terms and conditions
as may be agreed upon between the investment adviser and such sub-advisers and
approved by the Trustees. Any reference in this Declaration to the investment
adviser shall be deemed to include such sub-advisers unless the context
otherwise requires.
Section 3.3. Affiliations of Trustees or Officers, Etc. The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust is
a shareholder, director, officer,
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partner, trustee, employee, manager, adviser or distributor of or for
any partnership, corporation, trust, association or other organization
or of or for any parent or affiliate of any organization, with which a
contract of the character described in Sections 3.1 or 3.2 above or
for services as Custodian, Transfer Agent or disbursing agent or for
related services may have been or may hereafter be made, or that any
such organization, or any parent or affiliate thereof, is a
Shareholder of or has an interest in the Trust, or that
(ii) any partnership, corporation, trust, association or other
organization with which a contract or the character described in
Sections 3.1 or 3.2 above or for services as Custodian, Transfer Agent
or disbursing agent or for related services may have been or may
hereafter be made also has any one or more of such contracts with one
or more other partnerships, corporations, trusts, associations or
other organizations, or has other business or interests,
shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing the
same or create any liability or accountability to this Trust or its
Shareholders.
Section 3.4. Compliance with 1940 Act. Any contract entered
into pursuant to Sections 3.1 or 3.2 shall be consistent
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with and subject to the requirements of Section 15 of the Investment Company Act
of 1940 (including any amendment thereof or other applicable Act of Congress
hereafter enacted) with respect to its continuance in effect, its termination
and the method of authorization and approval of such contract or renewal
thereof.
ARTICLE IV
LIMITATIONS OF LIABILITY OF SHAREHOLDERS ,
TRUSTEES AND OTHERS
Section 4.1. No Personal Liability of Shareholders, Trustees, Etc. No
Shareholder shall be subject to any personal liability whatsoever to any Person
in connection with Trust Property or the acts, obligations or affairs of the
Trust. No Trustee, officer, employee or agent of the Trust shall be subject to
any personal liability whatsoever to any Person, other than to the Trust or its
Shareholders, in connection with Trust Property or the affairs of the Trust,
save only that arising from bad faith, willful misfeasance, gross negligence or
reckless disregard of his duties with respect to such Person; and all such
Persons shall look solely to the Trust Property for satisfaction of claims of
any nature arising in connection with the affairs of the Trust. If any
Shareholder, Trustee, officer, employee, or agent, as such, of the Trust is made
a party to any suit or proceeding to enforce any such liability of the Trust, he
shall not, on account thereof, be held to any personal liability. The
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Trust shall indemnify and hold each Shareholder harmless from and against all
claims and liabilities, to which such Shareholder may become subject by reason
of his being or having been a Shareholder, and shall reimburse such Shareholder
for all legal and other expenses reasonably incurred by him in connection with
any such claim or liability, provided that any such expenses shall be paid
solely out of the funds and property of the series of the Trust with respect to
which such Shareholder's Shares are issued. The rights accruing to a Shareholder
under this Section 4.1 shall not exclude any other right to which such
Shareholder may be lawfully entitled, nor shall anything herein contained
restrict the right of the Trust to indemnify or reimburse a Shareholder in any
appropriate situation even though not specifically provided herein.
Section 4.2. Non-Liability of Trustees, Etc. No Trustee, officer, employee
or agent of the Trust shall be liable to the Trust, its Shareholders, or to any
Shareholder, Trustee, officer, employee, agent or service provider thereof for
any action or failure to act by him or any other such Trustee, officer,
employee, agent or service provider (including without limitation the failure to
compel in any way any former or acting Trustee to redress any breach of trust)
except for his own bad faith, willful misfeasance, gross negligence or reckless
disregard of the duties involved in the conduct of his office. The term "service
provider" as used in this Section 4.2 shall
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include any investment adviser, principal underwriter or other person with whom
the Trust has an agreement for provision of services.
Section 4.3. Mandatory Indemnification.
(a) Subject to the exceptions and limitations contained in paragraph (b)
below:
(i) every person who is, or has been, a Trustee or officer of the
Trust shall be indemnified by the Trust to the fullest extent
permitted by law against all liability and against all expenses
reasonably incurred or paid by him in connection with any claim,
action, suit or proceeding in which he becomes involved as a party or
otherwise by virtue of his being or having been a Trustee or officer
and against amounts paid or incurred by him in the settlement thereof;
(ii) the words "claim," "action," "suit," or "proceeding" shall
apply to all claims, actions, suits or proceedings (civil, criminal,
or other, including appeals), actual or threatened; and the words
"liability" and "expenses" shall include, without limitation,
attorneys' fees, costs, judgments, amounts paid in settlement, fines,
penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Trustee or officer:
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(i) against any liability to the Trust or the Shareholders by
reason of a final adjudication by the court or other body before which
the proceeding was brought that he engaged in willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved
in the conduct of his office;
(ii) with respect to any matter as to which he shall have been
finally adjudicated not to have acted in good faith in the reasonable
belief that his action was in the best interest of the Trust;
(iii) in the event of a settlement or other disposition not
involving a final adjudication as provided in paragraph (b)(i)
resulting in a payment by a Trustee or officer, unless there has been
a determination that such Trustee or officer did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office:
(A) by the court or other body approving the settlement or
other disposition;
(B) based upon a review of readily available facts (as
opposed to a full trial-type inquiry) by (x) vote a majority of
the Disinterested Trustees acting on the matter (provided that a
majority of the Disinterested Trustees then in office act on
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the matter) or (y) written opinion of independent legal counsel.
(c) The rights of indemnification herein provided may be insured against by
policies maintained by the Trust, shall be severable, shall not affect any other
rights to which any Trustee or officer may now or hereafter be entitled, shall
continue as to a person who has ceased to be such Trustee or officer and shall
inure to the benefit of the heirs, executors, administrators and assigns of such
a person. Nothing contained herein shall affect any rights to indemnification to
which personnel of the Trust other than Trustees and officers may be entitled by
contract or otherwise under law.
(d) Expenses of preparation and presentation of a defense to any claim,
action, suit or proceeding of the character described in paragraph (a) of the
Section 4.3 may be advanced by the Trust prior to final disposition thereof upon
receipt of an undertaking by or on behalf of the recipient to repay such amount
if it is ultimately determined that he is not entitled to indemnification under
this Section 4.3, provided that either:
(i) such undertaking is secured by a surety bond or some other
appropriate security provided by the recipient, or the Trust shall be
insured against losses arising out of any such advances; or
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(ii) a majority of the Disinterested Trustees acting on the matter
(provided that a majority of the Disinterested Trustees act on the matter)
or an independent legal counsel in a written opinion shall determine, based
upon a review of readily available facts (as opposed to a full trial-type
inquiry), that there is reason to believe that the recipient ultimately
will be found entitled to indemnification.
As used in this Section 4.3, a "Disinterested Trustee" is one who is
not (A) an "Interested Person" of the Trust (including anyone who has been
exempted from being an "Interested Person" by any rule, regulation or order
of the Commission), or (B) involved in the claim, action, suit or
proceeding.
Section 4.4. No Bond Required of Trustees. No Trustee shall be obligated to
give any bond or other security for the performance of any of his duties
hereunder.
Section 4.5. No Duty of Investigation; Notice in Trust Instruments, Etc. No
purchaser, lender, transfer agent or other Person dealing with the Trustees or
any officer, employee or agent of the Trust shall be bound to make any inquiry
concerning the validity of any transaction purporting to be made by the Trustees
or by said officer, employee or agent or be liable for the application of money
or property paid, loaned, or delivered
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to or on the order of the Trustees or of said officer, employee or agent. Every
obligation, contract, instrument, certificate, Share, other security of the
Trust or undertaking, and every other act or thing whatsoever executed in
connection with the Trust shall be conclusively presumed to have been executed
or done by the executors thereof only in their capacity as Trustees under this
Declaration or in their capacity as officers, employees or agents of the Trust.
Every written obligation, contract, instrument, certificate, Share, other
security of the Trust or undertaking made or issued by the Trustees may recite
that the same is executed or made by them not individually, but as Trustees
under the Declaration, and that the obligations of the Trust under any such
instrument are not binding upon any of the Trustees or Shareholders
individually, but bind only the estate of the Trust or series, as applicable,
and may contain any former recital which they or he may deem appropriate, but
the omission of such recital shall not operate to bind the Trustees
individually. The Trustees shall at all times maintain insurance for the
protection of the Trust Property, its Shareholders, Trustees, officers,
employees and agents in such amount as the Trustees shall deem adequate to cover
possible tort liability, and such other insurance as the Trustees in their sole
judgement shall deem advisable.
Section 4.6. Reliance on Experts, Etc. Each Trustee and officer or employee
of the Trust shall, in the performance of his duties, be fully and completely
justified and protected with regard to any act or any failure to act resulting
from reliance in good faith upon the books of account or other records of the
Trust, upon an opinion of counsel, or upon reports made to the Trust by any of
its officers or employees or by the Investment
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Adviser, Distributor, Transfer Agent, selected dealers, accountants, appraisers
or other experts or consultants selected with reasonable care by the Trustees,
officers or employees of the Trust, regardless of whether such counsel or expert
may also be a Trustee.
ARTICLE V
SHARES OF BENEFICIAL INTEREST
Section 5.1. Beneficial Interest. The interest of the beneficiaries
hereunder shall be divided into transferable Shares of beneficial interest of
$.01 per value per Share. All Shares shall be of one class, except as provided
in Section 5.11 and Section 5.12 hereof. The number of Shares of beneficial
interest authorized hereunder is unlimited. All Shares issued hereunder
including, without limitation, Shares issued in connection with a dividend in
Shares or a split of Shares, shall be fully paid and non-assessable.
Section 5.2. Rights of Shareholders. The ownership of the Trust Property
and the property of each Series of the Trust of every description and the right
to conduct any business hereinbefore described are vested exclusively in the
Trustees, and the Shareholders shall have no interest therein other than the
beneficial interest conferred by their Shares, and they shall have no right to
call for any partition or division of any property, profits, rights or interests
of the Trust nor can they
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be called upon to share or assume any losses of the Trust or suffer an
assessment of any kind by virtue of their ownership of Shares. The Shares shall
be personal property giving only the rights in this Declaration specifically set
forth. The Shares shall not entitle the holder of preference, preemptive,
appraisal, conversion or exchange rights, except as the Trustees may determine
with respect to any series of Shares.
Section 5.3. Trust Only. It is the intention of the Trustees to create only
the relationship of Trustee and beneficiary between the Trustees and each
Shareholder from time to time. It is not the intention of the Trustees to create
a general partnership, limited partnership, joint stock association,
corporation, bailment or any form of legal relationship other than a trust.
Nothing in this Declaration 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 5.4. Issuance of Shares. The Trustees in their discretion may, from
time to time without vote of the Shareholders, issue Shares, in addition to the
then issued and outstanding Shares and Shares held in the treasury, to such
party or parties and for such amount and type of consideration, including cash
or property, at such time or times and on such terms as the Trustees may deem
best, and may in such manner
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acquire other assets (including the acquisition of assets subject to, and in
connection with the assumption of liabilities) and businesses. In connection
with any issuance of Shares, the Trustees may issue fractional Shares and Shares
held in the treasury, and Shares may be issued in separate series as provided in
Section 5.11 hereof. The Trustee may from time to time divide or combine the
Shares into a greater or lesser number without thereby changing the
proportionate beneficial interests in the Trust or any series. Contributions to
the Trust may be accepted for, and Shares shall be redeemed as, whole Shares
and/or 1/1,000ths of a Share or integral multiple thereof.
Section 5.5. Register of Shares. A register shall be kept at the principal
office of the Trust or an office of the Transfer Agent which shall contain the
names and addresses of the Shareholders and the number of Shares held by them
respectively and a record of all transfers thereof. Such register shall be
conclusive as to who are the holders of the Shares and who shall be entitled to
receive dividends or distributions or otherwise to exercise or enjoy the rights
of Shareholders. No Shareholder shall be entitled to receive payment of any
dividend or distribution, nor to have notice given to him as herein or in the
By-laws provided, until he has given his address to the Transfer Agent or such
other officer or agent of the Trustees as shall keep the said register for entry
thereon. It is not contemplated that certificates will be issued for the Shares;
however, the
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Trustees, in their discretion, may authorize the issuance of share
certificates and promulgate appropriate rules and regulations as to their use.
Section 5.6. Transfer of Shares. Shares shall be transferable on the
records of the Trust only by the record holder thereof or by his agent thereunto
duly authorized in writing, upon delivery to the Trustees or the Transfer Agent
of a duly executed instrument of transfer, together with such evidence of the
genuineness of each such execution and authorization and of other matters as may
reasonably be required. Upon such delivery the transfer shall be recorded on the
register of the Trust. Until such record is made, the Shareholder of record
shall be deemed to be the holder of such Shares for all purposes hereunder and
neither the Trustees nor any Transfer Agent or registrar nor any officer,
employee or agent of the Trust shall be affected by any notice of the proposed
transfer.
Any Person becoming entitled to any Shares in consequence of the death,
bankruptcy, or incompetence of any Shareholder, or otherwise by operation of
law, shall be recorded on the register of Shares as the holder of such Shares
upon production of the proper evidence thereof to the Trustees or the Transfer
Agent, but until such record is made, the Shareholder of record shall be deemed
to be the holder of such Shares for all purposes hereunder and neither the
Trustees nor any Transfer
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Agent or registrar nor any officer or agent of the Trust shall be affected by
any notice of such death, bankruptcy or incompetence, or other operation of law.
Section 5.7. Notices; Reports. Any and all notices to which any Shareholder
may be entitled and any and all communications shall be deemed duly served or
given if mailed, postage pre-paid, addressed to any Shareholder of record at his
last known address as recorded on the register of the Trust. A notice of a
meeting, an annual report and any other communication to Shareholders need not
be sent to a Shareholder (i) if an annual report and a proxy statement for two
consecutive shareholder meetings have been mailed to such Shareholder's address
and have been returned as undeliverable, (ii) if all, and at least two, checks
(if sent by first class mail) in payment of dividends on Shares during a
twelve-month period have been mailed to such Shareholder's address and have been
returned as undeliverable or (iii) in any other case in which a proxy statement
concerning a meeting of security holders is not required to be given pursuant to
the Commission's proxy rules as from time to time in effect under the Securities
Exchange Act of 1934. However, delivery of such proxy statements, annual reports
and other communications shall resume if and when such Shareholder delivers or
cause to be delivered to the Trust written notice setting forth such
Shareholder's then current address.
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Section 5.8. Treasury Shares. Shares held in the treasury shall, until
reissued pursuant to Section 5.4, not confer any voting rights on the Trustees,
nor shall such Shares be entitled to any dividends or other distributions
declared with respect to the Shares.
Section 5.9. Voting Powers. The Shareholders shall have power to vote only
(i) for the election of Trustees as provided in Section 2.12; (ii) for the
removal of Trustees as provided in Section 2.13; (iii) with respect to any
investment advisory or management contract entered into pursuant to Section 3.2;
(iv) with respect to termination of the Trust as provided in Section 8.2; (v)
with respect to any amendment of this Declaration to the extent and as provided
in Section 8.3; (vi) with respect to any merger, consolidation or sale of assets
as provided in Section 8.4; (vii) with respect to incorporation of the Trust to
the extent and as provided in Section 8.5; (viii) to the same extent as the
stockholders of a Massachusetts business corporation as to whether or not a
court action, proceeding or claim should or should not be brought or maintained
derivatively or as a class action on behalf of the Trust or any series or class
thereof or the Shareholders; (ix) with respect to any plan adopted pursuant to
Rule 12b-1 (or any successor rule) under the 1940 Act; and (x) with respect to
such additional matters relating to the Trust as may be required by this
Declaration, the
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By-laws or any registration of the Trust as an investment company under the 1940
Act with the Commission (or any successor agency) or as the Trustees may
consider necessary or desirable. Each whole Share shall be entitled to one vote
as to any matter on which it is entitled to vote and each fractional Share shall
be entitled to a proportionate fractional vote, except that the Trustees may, in
conjunction with the establishment of any series or class of Shares, establish
conditions under which the several series or class shall have separate voting
rights or, if a series or class would not, in the sole judgment of the Trustees,
be materially affected by a proposal, no voting rights. There shall be no
cumulative voting in the election of Trustees. Until Shares are issued, the
Trustees may exercise all rights of Shareholders and may take any action
required by law, this Declaration or the By-laws to be taken by Shareholders.
The By-laws may include further provisions for Shareholders' votes and meetings
and related matters.
Section 5.10. Meetings of Shareholders. Meetings of Shareholders may be
called at any time by the President, and shall be called by the President and
Secretary at the request in writing, or by resolution, of a majority of
Trustees, or at the written request of the holder or holders of ten percent
(10%) or more of the total number of Shares then issued and outstanding of the
Trust entitled to vote at such meeting. Any such request shall state the purpose
of the proposed meeting.
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Section 5.11. Series Designation. The Trustees, in their discretion, may
authorize the division of Shares into two or more series, and the different
series shall be established and designated and the variations in the relative
rights and preferences as between the different series shall be fixed and
determined, by the Trustees; provided, that all Shares shall be identical except
that there may be variations so fixed and determined between different series as
to investment objective, purchase price, right of redemption, special and
relative rights as to dividends and on liquidation, conversion rights, and
conditions under which the several series shall have separate voting rights. All
references to Shares in this Declaration shall be deemed to be Shares of any or
all series as the context may require.
If the Trustee shall divide the Shares of the Trust into two or more
series, the following provisions shall be applicable:
(a) All provisions herein relating to the Trust shall apply equally to
each series of the Trust except as the context requires otherwise.
(b) The number of authorized Shares and the number of Shares of each
series that may be issued shall be
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unlimited. The Trustees may classify or reclassify any unissued Shares or
any Shares previously issued and reacquired of any series into one or more
series that may be established and designated from time to time. The
Trustees may hold as treasury shares (of the same or some other series),
reissue for such consideration and on such terms as they may determine, or
cancel any Shares of any series acquired by the Trust at their discretion
from time to time.
(c) All consideration received by the Trust for the issue or sale of
Shares of a particular series, together with all assets in which such
consideration is invested or reinvested, all income, earnings, profits, and
proceeds thereof, including any proceeds derived from the sale, exchange or
liquidation of such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, shall
irrevocably belong to that series for all purposes, subject only to the
rights of creditors of such series and except as may otherwise be required
by applicable tax laws, and shall be so recorded upon the books of account
of the Trust. In the event that there are any assets, income, earnings,
profits, and proceeds thereof, funds, or payments which are not readily
identifiable as belonging to any particular series, the Trustees shall
allocate them among any one or more of the series established and
designated from time to time in such manner and on such basis as they, in
their sole discretion, deem fair
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and equitable. Each such allocation by the Trustees shall be conclusive and
binding upon all persons for all purposes.
(d) The assets belonging to each particular series shall be charged
with the liabilities of the Trust in respect of that series and all
expenses, costs, charges and reserves attributable to that series, and any
general liabilities, expenses, costs, charges or reserves of the Trust
which are not readily identifiable as belonging to any particular series
shall be allocated and charged by the Trustees to and among any one or more
of the series established and designated from time to time in such manner
and on such basis as the Trustees in their sole discretion deem fair and
equitable and no series shall be liable to any person except for its
allocated share. Each allocation of liabilities, expenses, costs, charges
and reserves by the Trustees shall be conclusive and binding upon all
persons for all purposes. The Trustees shall have full discretion, to the
extent not inconsistent with the 1940 Act, to determine which items are
capital; and each such determination and allocation shall be conclusive and
binding upon all persons. The assets of a particular series of the Trust
shall, under no circumstances, be charged with liabilities attributable to
any other series of the Trust. All persons extending credit to, or
contracting with or having any claim against a particular series of the
Trust shall look only to the assets of that particular series for payment
of such credit, contract or claim. No
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Shareholder or former Shareholder of any series shall have any claim on or
right to any assets allocated or belonging to any other series.
(e) Each Share of a series of the Trust shall represent a beneficial
interest in the net assets of such series. Each holder of Shares of a
series shall be entitled to receive his pro rata share of distributions of
income and capital gains made with respect to such series. Upon redemption
of his Shares or indemnification for liabilities incurred by reason of his
being or having been a Shareholder of a series, such Shareholder shall be
paid solely out of the funds and property of such series of the Trust. Upon
liquidation or termination of a series of the Trust, Shareholders of such
series shall be entitled to receive a pro rata share of the net assets of
such series. A Shareholder of a particular series of the Trust shall not be
entitled to participate in a derivative or class action on behalf of any
other series or the Shareholders of any other series of the Trust.
(f) Notwithstanding any other provision hereof, on any matter
submitted to a vote of Shareholders of the Trust, all Shares then entitled
to vote shall be voted by individual series, except that (i) when required
by the 1940 Act, Shares shall be voted in the aggregate and not by
individual series, and (ii) when the Trustees have determined
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that the matter affects only the interests of Shareholders of a limited
number of series, then only the Shareholders of such series shall be
entitled to vote thereon.
The establishment and designation of any series of Shares shall be
effective upon the execution by a majority of the then Trustees of an
instrument setting forth such establishment and designation and the
relative rights and preferences of such series, or as otherwise provided in
such instrument. At any time that there are no Shares outstanding of any
particular series previously established and designated, the Trustees may
by an instrument executed by a majority of their number abolish that series
and the establishment and designation thereof. Each instrument referred to
in this paragraph shall have the status of an amendment to this
Declaration.
Section 5.12. Class Designation. The Trustees, in their discretion, may
authorize the division of the Shares of the Trust, or, if any series be
established, the Shares of any series, into two or more classes, and the
different classes shall be established and designated, and the variations in the
relative rights and preferences as between the different classes shall be fixed
and determined, by the Trustees; provided, that all Shares of the Trust or of
any series shall be identical to all other shares of the Trust or the same
series, as the case may be, except that there may be variations between
different classes as to allocation of expenses, right of redemption, special and
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relative rights as to dividends and on liquidation, conversion rights, and
conditions under which the several classes shall have separate voting rights.
All references to Shares in this Declaration shall be deemed to be Shares of any
or all classes as the context may require.
If the Trustees shall divide the Shares of the Trust or any series into two
or more classes, the following provisions shall be applicable:
(a) All provisions herein relating to the Trust, or any series of the
Trust, shall apply equally to each class of Shares of the Trust or of any series
of the Trust, except as the context requires otherwise.
(b) The number of Shares of each class that may be issued shall be
unlimited. The Trustees may classify or reclassify any unissued Shares of the
Trust or of any series or any Shares previously issued and reacquired of the
Trust or of any series into one or more classes that may be established and
designated from time to time. The Trustees may hold as treasury Shares (of the
same or some other class), reissue for such consideration and on such terms as
they may determine, or cancel any Shares of any class reacquired by the Trust at
their discretion from time to time.
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(c) Liabilities, expenses, costs, charges and reserves related to the
distribution of, and other identified expenses that should properly be allocated
to, the Shares of a particular class may be charged to and borne solely by such
class and the bearing of expenses solely by a class of Shares may be
appropriately reflected (in a manner determined by the Trustees) and cause
differences in the net asset value attributable to, and the dividend, redemption
and liquidation rights of, the Shares of different classes. Each allocation of
liabilities, expenses, costs, charges and reserves by the Trustees shall be
conclusive and binding upon the Shareholders of all classes for all purpose.
(d) The establishment and designation of any class of Shares shall be
effective upon the execution by a majority of the then Trustees of an instrument
setting forth such establishment and designation and the relative rights and
preferences of such class, or as otherwise provided in such instrument. The
Trustees may, by an instrument executed by a majority of their number, abolish
any class and the establishment and designation thereof. Each instrument
referred to in this paragraph shall have the status of an amendment to this
Declaration.
Section 5.13. Assent to Declaration of Trust. Every Shareholder, by virtue
of having become a shareholder, shall be held to have expressly assented and
agreed to the terms hereof and to have become a party hereto.
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ARTICLE VI
REDEMPTION AND REPURCHASE OF SHARES
Section 6.1. Redemption of Shares. All Shares of the Trust shall be
redeemable, at the redemption price determined in the manner set out in this
Declaration. Redeemed or repurchased Shares may be resold by the Trust.
The Trust shall redeem the Shares at the price determined as hereinafter
set forth, upon the appropriately verified written application of the record
holder thereof (or upon such other form of request as the Trustees may
determine) at such office or agency as may be designated from time to time for
that purpose by the Trustees. The Trustees may from time to time specify
additional conditions, not inconsistent with the 1940 Act, regarding the
redemption of Shares in the Trust's then effective registration statement or
prospectus under the Securities Act of 1933.
Section 6.2. Price. Shares will be redeemed at their net asset value
determined as set forth in Section 7.1 hereof as of such time as the Trustees
shall have theretofore prescribed by resolution. In the absence of such
resolution, the redemption price of Shares deposited shall
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be the net asset value of such Shares next determined as set forth in Section
7.1 hereof after receipt of such application.
Section 6.3. Payment. Payment for such Shares shall be made in cash or in
property out of the assets of the relevant series of the Trust to the
Shareholder of record at such time and in the manner, not inconsistent with the
1940 Act or other applicable laws, as may be specified from time to time in the
Trust's then effective registration statement or prospectus under the Securities
Act of 1933, subject to the provisions of Section 6.4 hereof.
Section 6.4. Effect of Suspension of Determination of Net Asset Value. If,
pursuant to Section 6.9 hereof, the Trustees shall declare a suspension of the
determination of net asset value, the rights of Shareholders (including those
who shall have applied for redemption pursuant to Section 6.1 hereof but who
shall not yet have received payment) to have Shares redeemed and paid for by the
Trust shall be suspended until the termination of such suspension is declared.
Any record holder who shall have his redemption right so suspended may, during
the period of such suspension, by appropriate written notice of revocation at
the office or agency where application was made, revoke any application for
redemption not honored and withdraw any certificates on deposit. The redemption
price of Shares for which redemption applications have not been revoked shall be
the
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net asset value of such Shares next determined as set forth in Section 7.1
after the termination of such suspension, and payment shall be made within seven
(7) days after the date upon which the application was made plus the period
after such application during which the determination of net asset value was
suspended.
Section 6.5. Repurchase by Agreement. The Trust may repurchase Shares
directly, or through the Distributor or another agent designated for the
purpose, by agreement with the owner thereof at a price not exceeding the net
asset value per Share determined as of the time when the purchase or contract of
purchase is made or the net asset value as of any time which may be later
determined pursuant to Section 7.1 hereof, provided payment is not made for the
Shares prior to the time as of which such net asset value is determined.
Section 6.6. Redemption of Shareholder's Interest. The Trust shall have the
right at any time without prior notice to the Shareholder to redeem Shares of
any Shareholder for their then current net asset value per Share if at such time
the Shareholder owns Shares having an aggregate net asset value of less than an
amount set from time to time by the Trustees subject to such terms and
conditions as the Trustees may approve, and subject to the Trust's giving
general notice to all Shareholders of its intention to avail itself of such
right, either by
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publication in the Trust's prospectus, if any, or by such other means as the
Trustees may determine.
Section 6.7. Reductions in Number of Outstanding Shares Pursuant to Net
Asset Value Formula. The Trust may reduce the number of outstanding Shares
pursuant to the provisions of Section 7.3.
Section 6.8. Suspension of Right of Redemption. The Trust may declare a
suspension of the right of redemption or postpone the date of payment or
redemption for the whole or any part of any period (i) during which the New York
Stock Exchange is closed other than customary weekend and holiday closing, (ii)
during which trading on the New York Stock Exchange is restricted, (iii) during
which an emergency exists as a result of which disposal by the Trust of
securities owned by it is not reasonably practicable or it is not reasonably
practicable for the Trust fairly to determine the value of its net assets, or
(iv) during any other period when the Commission may for the protection of
security holders of the Trust by order permit suspension of the right of
redemption or postponement of the date of payment or redemption; provided that
applicable rules and regulations of the Commission shall govern as to whether
the conditions prescribed in (ii), (iii), or (iv) exist. Such suspension shall
take effect at such time as the Trust shall specify but not later than the close
of business on the business
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day next following the declaration of suspension, and thereafter there shall be
no right of redemption or payment on redemption until the Trust shall declare
the suspension at an end, except that the suspension shall terminate in any
event on the first day on which said stock exchange shall have reopened or the
period specified in (ii) or (iii) shall have expired (as to which, in the
absence of an official ruling by the Commission, the determination of the Trust
shall be conclusive). In the case of a suspension of the right of redemption, a
Shareholder may either withdraw his request for redemption or receive payment
based on the net asset value existing after the termination of the suspension.
ARTICLE VII
DETERMINATION OF NET ASSET VALUE,
NET INCOME AND DISTRIBUTIONS
Section 7.1. Net Asset Value. The value of the assets of any series of the
Trust shall be determined by appraisal of the securities allocated to such
series, such appraisal to be on the basis of the amortized cost of such
securities in the case of money market securities or market value in the case of
other securities, or, consistent with the rules and regulations of the
Commission, by such other method as shall be deemed to reflect the fair value
thereof, determined in good faith by or under the direction of the Trustees.
From the total value of said assets, there shall be deducted all indebtedness,
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interest, taxes, payable or accrued, including estimated taxes on unrealized
book profits, expenses and management charges accrued to the appraisal date, net
income determined and declared as a distribution and all other items in the
nature of liabilities attributable to the Trust or such series or class thereof
which shall be deemed appropriate. The net asset value of a Share shall be
determined by dividing the net asset value of the class, or, or if no class has
been established, of the series, or, if no series has been established, of the
Trust, by the number of Shares of that class, or series, or of the Trust, as
applicable, outstanding. The net asset value of the Trust or any class or series
of the Trust shall be determined pursuant to the procedure and methods
prescribed or approved by the Trustees in their discretion and as set forth in
the most recent Registration Statement of the Trust as filed with the Securities
and Exchange Commission pursuant to the requirements of the Securities Act of
1933, as amended, the Investment Company Act of 1940, as amended, and the Rules
thereunder. The net asset value of the Shares shall be determined at least once
on each business day, as of the close of trading on the New York Stock Exchange
or as of such other time or times as the Trustees shall determine. The power and
duty to make the daily calculations may be delegated by the Trustees to the
Investment Adviser, the Custodian, the Transfer Agent or such other Person as
the Trustees by resolution may determine. The Trustees may suspend the daily
determination of net asset value to the extent permitted by the 1940 Act.
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Section 7.2. Distributions to Shareholders. The Trustees shall from time to
time distribute ratably among the Shareholders of a series such proportion of
the net profits, surplus (including paid-in surplus), capital, or assets of such
series held by the Trustees as they may deem proper. Such distributions may be
made in cash or property (including without limitation any type of obligations
of such series or any assets thereof), and the Trustees may distribute ratably
among the Shareholders additional Shares of such series issuable hereunder in
such manner, at such times, and on such terms as the Trustees may deem proper.
Such distributions may be among the Shareholders of record at the time of
declaring a distribution or among the Shareholders of record at such other date
or time or dates or times as the Trustees shall determine. The Trustees may in
their discretion determine that, solely for the purposes of such distributions,
Outstanding Shares shall exclude Shares for which orders have been placed
subsequent to a specified time on the date the distribution is declared or on
the next preceding day if the distribution is declared as of a day on which New
York banks are not open for business, all as described in the then effective
registration statement or prospectus under the Securities Act of 1933. Pursuant
to a standing resolution, the Trustees may declare distributions on a daily or
other periodic basis. The Trustees may always retain from the net profits such
amount as they may deem necessary to pay the debts or expenses of
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the series or to meet obligations of the series, or as they may deem desirable
to use in the conduct of its affairs or to retain for future requirements or
extensions of the business. The Trustees may adopt and offer to Shareholders
such dividend reinvestment plans, cash dividend payout plans or related plans as
the Trustees shall deem appropriate.
Inasmuch as the computation of net income and gains for Federal income tax
purposes may vary from the computation thereof on the books, the above
provisions shall be interpreted to give the Trustees the power in their
discretion to distribute for any fiscal year as ordinary dividends and as
capital gains distributions, respectively, additional amounts sufficient to
enable the Trust or the series to avoid or reduce liability for taxes.
Section 7.3. Determination of Net Income; Constant Net Asset Value;
Reduction of Outstanding Shares. Subject to Section 5.11 and Section 5.12
hereof, the net income of any series of the Trust shall be determined in such
manner as the Trustees shall provide by resolution. Expenses of the series,
including the advisory or management fee, shall be accrued each day. Such net
income may be determined by or under the direction of the Trustees as of the
close of trading on the New York Stock Exchange on each day on which such market
is open or as of such other time or times as the Trustees shall determine, and,
except
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as provided herein, all the net income of the series, so determined, may be
declared as a dividend on the Outstanding Shares of such series. If, for any
reason, the net income of the series determined at any time is a negative
amount, the Trustees shall have the power (i) to offset each Shareholder's pro
rata share of such negative amount from the accrued dividend account of such
Shareholder, or (ii) to reduce the number of Outstanding Shares of the series by
reducing the number of Shares in the account of such Shareholder by that number
of full and factional Shares which represents the amount of such excess negative
net income, or (iii) to cause to be recorded on the books of the series an asset
account in the amount of such negative income, which account may be reduced by
the amount, provided that the same shall thereupon become the property of the
series and shall not be paid to any Shareholder, of dividends declared
thereafter upon the Outstanding Shares on the day such negative net income is
experienced, until such asset account is reduced to zero; or (iv) to combine the
methods described in clauses (i), (ii) and (iii) of this sentence, in order to
cause the net asset value per Share of the series to remain at a constant amount
per Outstanding Share immediately after each such determination and declaration.
The Trustees shall also have the power to fail to declare a dividend out of net
income for the purpose of causing the net asset value per Share of the series to
be increased to a constant amount. The Trustees shall not be required to adopt,
but may at any time adopt, discontinue or amend the practice of
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maintaining the net asset value per Share of a series at a constant amount.
Section 7.4. Allocation Between Principal and Income. The Trustees shall
have full discretion to determine whether any cash or property received shall be
treated as income or as principal and whether any item of expense shall be
charged to the income or the principal account, and their determination made in
good faith shall be conclusive upon the Shareholders. In the case of stock
dividends received, the Trustees shall have full discretion to determine, in the
light of the particular circumstances, how much if any of the value thereof
shall be treated as income, the balance, if any, to be treated as principal.
Section 7.5. Power to Modify Foregoing Procedures. Notwithstanding any of
the foregoing provisions of this Article VII, the Trustees may prescribe, in
their absolute discretion, such other bases and times for determining the per
Share net asset value of the series' Shares or net income, or the declaration
and payment of dividends and distributions as they may deem necessary or
desirable. Without limiting the generality of the foregoing, the Trustees may
establish several series of Shares in accordance with Section 5.11, and declare
dividends thereon in such manner as they shall determine.
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ARTICLE VIII
DURATION; TERMINATION OF TRUST;
AMENDMENT; MERGERS, ETC.
Section 8.1. Duration. The Trust or the series of the Trust shall continue
without limitation of time but subject to the provisions of this Article VIII.
Section 8.2. Termination of Trust or Series of the Trust. (a) The Trust or
any series of the Trust may be terminated by the affirmative vote of the holders
of not less than two-thirds of the Shares outstanding and entitled to vote, at
any meeting of the Shareholders or by an instrument in writing, without a
meeting, signed by a majority of the Trustees and consented to by the holders of
not less than two-thirds of such Shares, or by such other vote as may be
established by the Trustees with respect to any series of Shares. Upon the
termination of the Trust or any series of the Trust,
(i) The Trust or the series of the Trust shall carry on no
business except for the purpose of winding up its affairs.
(ii) The Trustees shall proceed to wind up the affairs of the
Trust or the series of the Trust and all of the powers of the Trustees
under this Declaration shall continue until the affairs of the Trust
or the series of the Trust shall have been wound up, including the
power to fulfill or discharge the contracts of the Trust or the series
of the Trust, collect its assets,
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sell, convey, assign, exchange, transfer or otherwise dispose of all
or any part of the remaining Trust Property or property of the series
of the Trust to one or more persons at public or private sale for
consideration which may consist in whole or in part of cash,
securities or other property of any kind, discharge or pay its
liabilities, and do all other acts appropriate to liquidate its
business; provided that any sale, conveyance, assignment, exchange,
transfer or other disposition of all or substantially all the Trust
Property or property of the series of the Trust shall require
Shareholder approval in accordance with Section 8.4 hereof.
(iii) After paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities and
refunding agreements as they deem necessary for their protection, the
Trustees may distribute the remaining Trust Property or property of
the series of the Trust, in cash or in kind or partly each, among the
Shareholders according to their respective rights.
(b) After termination of the Trust or any series of the Trust and
distribution to the Shareholders as herein provided, a majority of the Trustees
shall execute and lodge
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among the records of the Trust or the series of the Trust an instrument in
writing setting forth the fact of such termination, and the Trustees shall
thereupon be discharged from all further liabilities and duties hereunder, and
the rights and interests of all Shareholders shall thereupon cease.
Section 8.3. Amendment Procedure. (a) This Declaration may be amended by a
vote of the holders of a majority of the Shares outstanding and entitled to vote
or by any instrument in writing, without a meeting, signed by a majority of the
Trustees and consented to by the holders of a majority of the Shares outstanding
and entitled to vote. The Trustees may also amend this Declaration without the
vote or consent of Shareholders to change the name of the Trust, to supply any
omission, to cure, correct or supplement any ambiguous, defective or
inconsistent provision hereof, to make any other changes in the Declaration
which do not materially adversely affect the rights of Shareholders hereunder,
or if they deem it necessary to conform this Declaration to the requirements of
applicable federal laws or regulations or the requirements of the regulated
investment company provisions of the Internal Revenue Code, but the Trustees
shall not be liable for failing to do so.
(b) No amendment may be made under this Section 8.3 which would change any
rights with respect to any Shares of the Trust by reducing the amount payable
thereon upon liquidation of
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the Trust or by diminishing or eliminating any voting rights pertaining thereto,
except with the vote or consent of the holders of two-thirds of the Shares
outstanding and entitled to vote, or by such other vote as may be established by
the Trustees with respect to any series of Shares. Nothing contained in this
Declaration shall permit the amendment of this Declaration to impair the
exemption from personal liability of the Shareholders, Trustees, officers,
employees and agents of the Trust or to permit assessments upon Shareholders.
(c) A certificate signed by a majority of the Trustees setting forth an
amendment and reciting that it was duly adopted by the Shareholders or by the
Trustees as aforesaid or a copy of the Declaration, as amended, and executed by
a majority of the Trustees, shall be conclusive evidence of such amendment when
lodged among the records of the Trust.
Notwithstanding any other provision hereof, until such time as a
Registration Statement under the Securities Act of 1933, as amended, covering
the first public offering of securities of the Trust shall become effective,
this Declaration may be terminated or amended in any respect by the affirmative
vote of a majority of the Trustees or by an instrument signed by a majority of
the Trustees.
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Section 8.4. Merger, Consolidation and Sale of Assets. The Trust may merge
or consolidate with any other corporation, association, trust or other
organization or may sell, lease or exchange all or substantially all of the
Trust Property, including its good will, upon such terms and conditions and for
such consideration when and as authorized at any meeting of Shareholders called
for the purpose by the affirmative vote of the holders of two-thirds of the
Shares outstanding and entitled to vote, or by an instrument or instruments in
writing without a meeting, consented to by the holders of two-thirds of the
Shares or by such other vote as may be established by the Trustees with respect
to any series of Shares; provided, however, that if such merger, consolidation,
sale, lease or exchange is recommended by the Trustees, the vote or written
consent of the holders of a majority of the Shares outstanding and entitled to
vote, or such other vote or written consent as may be established by the
Trustees with respect to any series of Shares, shall be sufficient
authorization; and any such merger, consolidation, sale, lease or exchange shall
be deemed for all purposes to have been accomplished under and pursuant to the
statutes of the Commonwealth of Massachusetts.
Section 8.5. Incorporation. With the approval of the holders of a majority
of the Shares outstanding and entitled to vote, or by such other vote as may be
established by the Trustees with respect to any series of Shares, the Trustees
may cause to
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be organized or assist in organizing a corporation or corporations
under the laws of any jurisdiction or any other trust, partnership, association
or other organization to take over all of the Trust Property or to carry on any
business in which the Trust shall directly or indirectly have any interest, and
to sell, convey and transfer the Trust Property to any such corporation, trust,
association or organization in exchange for the Shares or securities thereof or
otherwise, and to lend money to, subscribe for the Shares or securities of, and
enter into any contracts with any such corporation, trust, partnership,
association or organization, or any corporation, partnership, trust, association
or organization in which the Trust holds or is about to acquire shares or any
other interest. The Trustees may also cause a merger or consolidation between
the Trust or any successor thereto and any such corporation, trust, partnership,
association or other organization if and to the extent permitted by law, as
provided under the law then in effect. Nothing contained herein shall be
construed as requiring approval of Shareholders for the Trustees to organize or
assist in organizing one or more corporations, trusts, partnerships,
associations or other organizations and selling, conveying or transferring a
portion of the Trust Property to such organizations or entities.
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ARTICLE IX
REPORTS TO SHAREHOLDERS
The Trustees shall at least semiannually submit to the Shareholders a
written financial report, which may be included in the Trust's prospectus, of
the transactions of the Trust, including financial statements which shall at
least annually be certified by independent public accountants.
ARTICLE X
MISCELLANEOUS
Section 10.1. Filing. This Declaration and any amendment hereto shall be
filed in the office of the Secretary of the Commonwealth of Massachusetts and in
such other places as may be required under the laws of Massachusetts and may
also be filed or recorded in such other places as the Trustees deem appropriate.
Each amendment so filed shall be accompanied by a certificate signed and
acknowledged by a Trustee stating that such action was duly taken in a manner
provided herein, and unless such amendment or such certificate sets forth some
later time for the effectiveness of such amendment, such amendment shall be
effective upon its filing. A restated Declaration, integrating into a single
instrument all of the provisions of the Declaration which are then in effect and
operative, may be executed from time to time by a majority of the Trustees and
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shall, upon filing with the Secretary of the Commonwealth of Massachusetts, be
conclusive evidence of all amendments contained therein and may hereafter be
referred to in lieu of the original Declaration and the various amendments
thereto.
Section 10.2. Governing Law. This Declaration is executed by the Trustees
and delivered in the Commonwealth of Massachusetts and with reference to the
laws thereof, and the rights of all parties and the validity and construction of
every provision hereof shall be subject to and construed according to the laws
of said State.
Section 10.3. Counterparts. This Declaration may be simultaneously executed
in several counterparts, each of which shall be deemed to be an original, and
such counterparts, together, shall constitute one and the same instrument, which
shall be sufficiently evidenced by any such original counterpart.
Section 10.4. Reliance by Third Parties. Any certificate executed by an
individual who, according to the records of the Trust appears to be a Trustee
hereunder, certifying to: (a) the number or identity of Trustees or
Shareholders, (b) the due authorization of the execution of any instrument or
writing, (c) the form of any vote passed at a meeting of Trustees or
Shareholders, (d) the fact that the number of Trustees or Shareholders present
at any meeting or executing
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any written instrument satisfies the requirements of this Declaration, (e) the
form of any By-laws adopted by or the identity of any officers elected by the
Trustees, or (f) the existence of any fact or facts which in any manner relate
to the affairs of the Trust, shall be conclusive evidence as to the matters so
certified in favor of any Person dealing with the Trustees and their successors.
Section 10.5. Provisions in Conflict with Law or Regulations. (a) The
provisions of this Declaration are severable, and if the Trustees shall
determine, with the advice of counsel, that any of such provisions is in
conflict with the 1940 Act, the regulated investment company provisions of the
Internal Revenue Code or with other applicable laws and regulations, the
conflicting provision shall be deemed never to have constituted a part of this
Declaration; provided, however, that such determination shall not affect any of
the remaining provisions of this Declaration or render invalid or improper any
action taken or omitted prior to such determination.
(b) If any provision of this Declaration shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any manner
affect such provisions in any other jurisdiction or any other provision of this
Declaration in any jurisdiction.
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Section 10.6. Principal Place of Business. The principal place of business
of the Trust is c/o New England Investment Companies L.P., 100 Park Avenue, New
York, New York 10017. The principal place of business may be changed by
resolution of a majority of the Trustees.
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IN WITNESS WHEREOF, the undersigned has executed this instrument this 31st
day of August, 1994.
\s\ Caroline Pearson
--------------------
Caroline Pearson
(as Trustee and not individually)
Ten Post Office Square, Suite 1230
Boston, MA 02109
\s\ Kathleen E. Kehoe
----------------
Kathleen E. Kehoe, Trustee
(as Trustee and not individually)
Ten Post Office Square, Suite 1230
Boston, MA 02109
