AGREEMENT AND DECLARATION OF TRUST
OF
XXXXXXXXX GLOBAL INCOME FUND
A DELAWARE STATUTORY TRUST
TABLE OF CONTENTS
PAGE
ARTICLE I. NAME; OFFICES; REGISTERED AGENT; DEFINITIONS.................1
SECTION 1. NAME.........................................................1
SECTION 2. OFFICES OF THE TRUST.........................................1
SECTION 3. REGISTERED AGENT AND REGISTERED OFFICE.......................1
SECTION 4. DEFINITIONS..................................................1
ARTICLE II. PURPOSE OF TRUST.............................................3
ARTICLE III. SHARES.......................................................5
SECTION 1. DIVISION OF BENEFICIAL INTEREST..............................5
SECTION 2. SALE OF SHARES...............................................6
SECTION 3. STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY........6
SECTION 4. POWER OF BOARD OF TRUSTEES TO MAKE TAX STATUS ELECTION.......7
SECTION 5. SERIES AND CLASSES...........................................7
SECTION 6. INDEMNIFICATION OF SHAREHOLDERS..............................7
ARTICLE IV. THE BOARD OF TRUSTEES........................................7
SECTION 1. NUMBER, CLASSES AND ELECTION, TERM, REMOVAL AND RESIGNATION..7
SECTION 2. TRUSTEE ACTION BY WRITTEN CONSENT WITHOUT A MEETING..........8
SECTION 3. POWERS; OTHER BUSINESS INTERESTS; QUORUM AND REQUIRED VOTE...8
(a) Powers...................................................8
(b) Other Business Interests.................................9
(c) Quorum and Required Vote................................10
SECTION 4. PAYMENT OF EXPENSES BY THE TRUST............................10
SECTION 5. PAYMENT OF EXPENSES BY SHAREHOLDERS.........................10
SECTION 6. OWNERSHIP OF TRUST PROPERTY.................................10
SECTION 7. SERVICE CONTRACTS...........................................10
ARTICLE V. SHAREHOLDERS' VOTING POWERS AND MEETINGS....................12
SECTION 1. VOTING POWERS...............................................12
SECTION 2. QUORUM AND REQUIRED VOTE....................................12
SECTION 3. SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING.....12
SECTION 4. RECORD DATES................................................13
SECTION 5. ADDITIONAL PROVISIONS.......................................13
ARTICLE VI. NET ASSET VALUE; DISTRIBUTIONS; REPURCHASES; TRANSFERS......14
SECTION 1. DETERMINATION OF NET ASSET VALUE, NET INCOME AND
DISTRIBUTIONS...............................................14
SECTION 2. REPURCHASE OF SHARES WITH SHAREHOLDER CONSENT...............14
SECTION 3. REPURCHASE OF SHARES WITHOUT SHAREHOLDER CONSENT............15
SECTION 4. TRANSFER OF SHARES..........................................15
ARTICLE VII. LIMITATION OF LIABILITY AND INDEMNIFICATION OF AGENT........15
SECTION 1. LIMITATION OF LIABILITY.....................................15
SECTION 2. INDEMNIFICATION.............................................16
(a) Indemnification by Trust...........................16
(b) Exclusion of Indemnification.......................16
(c) Required Approval..................................17
(d) Advancement of Expenses............................17
(e) Other Contractual Rights...........................17
(f) Fiduciaries of Employee Benefit Plan...............17
SECTION 3. INSURANCE...................................................17
SECTION 4. DERIVATIVE ACTIONS..........................................17
ARTICLE VIII. APPROVAL OF CERTAIN TRANSACTIONS............................18
SECTION 1. VOTE REQUIRED...............................................18
SECTION 2. DISSOLUTION.................................................18
SECTION 3. MERGER OR CONSOLIDATION; CONVERSION; REORGANIZATION.........18
(a) Merger or Consolidation.................................18
(b) Conversion..............................................19
(c) Reorganization..........................................19
SECTION 4. RECLASSIFICATION OF THE TRUST...............................20
ARTICLE IX. AMENDMENTS..................................................20
SECTION 1. AMENDMENTS GENERALLY........................................20
SECTION 2. SPECIAL AMENDMENTS..........................................20
ARTICLE X. MISCELLANEOUS...............................................20
SECTION 1. REFERENCES; HEADINGS; COUNTERPARTS..........................20
SECTION 2. APPLICABLE LAW..............................................21
SECTION 3. PROVISIONS IN CONFLICT WITH LAW OR REGULATIONS..............21
SECTION 4. STATUTORY TRUST ONLY........................................21
SECTION 5. USE OF THE NAMES "FRANKLIN" OR "XXXXXXXXX"..................21
AGREEMENT AND DECLARATION OF TRUST
OF
XXXXXXXXX GLOBAL INCOME FUND
AGREEMENT AND DECLARATION OF TRUST made as of this 2nd day of December,
2003, by the Trustees hereunder, and by the holders of Shares to be issued by
the Trust hereunder as hereinafter provided.
WITNESSETH:
WHEREAS this Trust is being formed to carry on the business of a
closed-end management investment company as defined in the 1940 Act; and
WHEREAS the Trustees have agreed to manage all property coming into
their hands as trustees of a Delaware statutory trust in accordance with the
provisions of the Delaware Statutory Trust Act, as amended from time to time,
and the provisions hereinafter set forth;
NOW, THEREFORE, the Trustees hereby declare that they will hold all
cash, securities and other assets that they may from time to time acquire in any
manner as Trustees hereunder IN TRUST to manage and dispose of the same upon the
following terms and conditions for the benefit of the holders from time to time
of Shares created hereunder as hereinafter set forth.
ARTICLE I.
NAME; OFFICES; REGISTERED AGENT; DEFINITIONS
Section 1. NAME. This Trust shall be known as "Xxxxxxxxx Global Income
Fund" and the Board of Trustees shall conduct the business of the Trust under
that name, or any other name as it may from time to time designate.
Section 2. OFFICES OF THE TRUST. The Board may at any time establish
offices of the Trust at any place or places where the Trust intends to do
business.
Section 3. REGISTERED AGENT AND REGISTERED OFFICE. The name of the
registered agent of the Trust and the address of the registered office of the
Trust are as set forth in the Trust's Certificate of Trust.
Section 4. DEFINITIONS. Whenever used herein, unless otherwise required by
the context or specifically provided:
(a) "1940 ACT" shall mean the Investment Company Act of 1940 and the
rules and regulations thereunder, all as adopted or amended from time to time;
(b) "AFFILIATE" shall have the same meaning as "affiliated person" as
such term is defined in the 1940 Act when used with reference to a specified
Person, as defined below.
(c) "BOARD OF TRUSTEES" shall mean the governing body of the Trust,
that is comprised of the number of Trustees of the Trust fixed from time to time
pursuant to Article IV hereof, having the powers and duties set forth herein;
(d) "BY-LAWS" shall mean By-Laws of the Trust, as amended or restated
from time to time in accordance with Article VIII therein. Such By-Laws may
contain any provision not inconsistent with applicable law or this Declaration
of Trust, relating to the governance of the Trust;
(e) "CERTIFICATE OF TRUST" shall mean the certificate of trust of the
Trust to be filed with the office of the Secretary of State of the State of
Delaware as required under the Delaware Statutory Trust Act, as amended from
time to time, to form the Trust, as such certificate shall be amended or
restated from time to time and filed with such office;
(f) "CODE" shall mean the Internal Revenue Code of 1986 and the rules
and regulations thereunder, all as adopted or amended from time to time;
(g) "COMMISSION" shall have the meaning given that term in the 1940
Act;
(h) "DSTA" shall mean the Delaware Statutory Trust Act (12 DEL.
C.ss.3801, ET SEQ.), as amended from time to time;
(i) "DECLARATION OF TRUST" shall mean this Agreement and Declaration
of Trust, as amended or restated from time to time;
(j) "INTERESTED PERSON" shall have the meaning given that term in the
1940 Act;
(k) "INVESTMENT ADVISER" or "ADVISER" shall mean a Person, as defined
below, furnishing services to the Trust pursuant to any investment advisory or
investment management contract described in Article IV, Section 7(a) hereof;
(l) "NATIONAL FINANCIAL EMERGENCY" shall mean the whole or any part of
any period during (i) which an emergency exists as a result of which disposal by
the Trust of securities or other assets owned by the Trust is not reasonably
practicable; (ii) which it is not reasonably practicable for the Trust fairly to
determine the net asset value of its assets; or (iii) such other period as the
Commission may by order permit for the protection of investors;
(m) "PERSON" shall mean a natural person, partnership, limited
partnership, limited liability company, trust, estate, association, corporation,
organization, custodian, nominee or any other individual or entity in its own or
any representative capacity, in each case, whether domestic or foreign, and a
statutory trust or a foreign statutory or business trust;
(n) "PRINCIPAL UNDERWRITER" shall have the meaning given that term in
the 1940 Act;
(o) "SHARES" shall mean the outstanding shares of beneficial interest
into which the beneficial interest in the Trust shall be divided from time to
time, and shall include fractional and whole shares;
(p) "SHAREHOLDER" shall mean a record owner of Shares pursuant to the
By-Laws;
(q) "TRUST" shall mean the Delaware statutory trust formed pursuant to
this Declaration of Trust and the filing of the Certificate of Trust with the
office of the Secretary of State of the State of Delaware;
(r) "TRUST PROPERTY" shall mean any and all property, real or
personal, tangible or intangible, which is owned or held by or for the account
of the Trust, including, without limitation, the rights referenced in Article X,
Section 5 hereof;
(s) "TRUSTEE" or "TRUSTEES" shall mean each Person that signs this
Declaration of Trust as a trustee, so long as such signatory continues in office
in accordance with the terms hereof, and all other Persons who may, from time to
time, be duly elected or appointed, qualified and serving on the Board of
Trustees in accordance with the provisions hereof and the By-Laws. Reference
herein to a Trustee or the Trustees shall refer to such Person or Persons in
such Person's or Persons' capacity as a trustee or trustees hereunder and under
the By-Laws; and
(t) "VOTE OF A MAJORITY OF THE OUTSTANDING VOTING SECURITIES" shall
have the meaning provided under Subsection 2(a)(42) of the 1940 Act or any
successor provision thereof, which Subsection, as of the date hereof, is as
follows: the vote, at a meeting of the Shareholders, (i) of sixty-seven percent
(67%) or more of the voting securities present in person or represented by proxy
at such meeting, if the holders of more than fifty percent (50%) of the
outstanding voting securities of the Trust are present or represented by proxy;
or (ii) of more than fifty percent (50%) of the outstanding voting securities of
the Trust, whichever is the less.
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 1940 Act,
investing primarily in securities and other financial instruments or property,
and to exercise all of the powers granted to a statutory trust formed under the
DSTA, including, without limitation, the following powers:
(a) To hold, invest and reinvest its funds, and in connection
therewith to hold part or all of its funds in cash, and to purchase, subscribe
for or otherwise acquire, hold for investment or otherwise, to trade and deal
in, write, sell, assign, negotiate, transfer, exchange, lend, pledge or
otherwise dispose of, turn to account for, or realize upon, securities (which
term "securities" shall for the purposes of this Declaration of Trust, without
limitation of the generality thereof, be deemed to include any stocks, shares,
bonds, debentures, bills, notes, mortgages, other obligations or evidences of
indebtedness, or financial instruments of any kind or nature, and any options,
certificates, receipts, warrants, futures contracts or other instruments
representing rights to receive, purchase or subscribe for the same, or
evidencing or representing any other rights or interests therein or in any
property or assets, and any negotiable or non-negotiable instruments and money
market instruments, including bank certificates of deposit, finance paper,
commercial paper, bankers' acceptances and all kinds of repurchase or reverse
repurchase agreements) created or issued by any United States or foreign issuer
(which term "issuer" shall, for the purposes of this Declaration of Trust,
without limiting the generality thereof, be deemed to include any persons,
firms, associations, partnerships, corporations, trusts, syndicates,
combinations, organizations, governments or subdivisions, agencies or
instrumentalities of any government); and to exercise, as owner or holder of any
securities, all rights, powers and privileges in respect thereof; and to do any
and all acts and things for the preservation, protection, improvement and
enhancement in value of any and all such securities, financial instruments or
other assets.
(b) To acquire all or any part of the goodwill, rights, property, real
estate, interests in real estate and business of any person, firm, association
or corporation heretofore or hereafter engaged in any business similar to any
business which the Trust has the power to conduct, and to hold, utilize, enjoy
and in any manner dispose of the whole or any part of the rights, property, real
estate, interests in real estate and business so acquired, and to assume in
connection therewith any liabilities of any such person, firm, association or
corporation.
(c) To apply for, obtain, purchase or otherwise acquire, any patents,
copyrights, licenses, trademarks, trade names and the like, which may seem
capable of being used for any of the purposes of the Trust; and to use,
exercise, develop, grant licenses in respect of, sell and otherwise turn to
account, the same.
(d) To issue and sell shares of beneficial interest, securities
convertible into such shares of beneficial interest, or other security or
evidence of indebtedness, in such amounts and on such terms and conditions, for
such purposes and for such amount or kind of consideration (including, without
limitation thereto, securities) now or hereafter permitted by the laws of the
State of Delaware, by the 1940 Act, and by this Declaration of Trust, as the
Board of Trustees may determine.
(e) To purchase or otherwise acquire, hold, dispose of, resell,
transfer, reissue or cancel (all without the vote of the Shareholders) shares of
beneficial interest in any manner and to the extent now or hereafter permitted
by the laws of the State of Delaware, by the 1940 Act and by this Declaration of
Trust.
(f) To conduct its business in all its branches at one or more offices
in Delaware and elsewhere in any part of the world, without restriction, or
limit as to extent.
(g) To exercise and enjoy, in Delaware and in any other states,
territories, districts and United States dependencies and in foreign countries,
all of the powers, rights and privileges granted to, or conferred upon,
statutory trusts by the DSTA now or hereafter in force, and the enumeration of
the foregoing powers shall not be deemed to exclude any powers, rights or
privileges so granted or conferred.
(h) In general, to carry on any other business in connection with or
incidental to its trust purposes, to do everything necessary, suitable or proper
for the accomplishment of such purposes or for the attainment of any object or
the furtherance of any power hereinbefore set forth, either alone or in
association with others, to do every other act or thing incidental or
appurtenant to, or growing out of, or connected with, its business or purposes,
objects or powers, and, subject to the foregoing, to have and exercise all the
powers, rights and privileges conferred upon statutory trusts by the laws of the
State of Delaware as in force from time to time.
(i) The Trust shall not be limited to investing in obligations
maturing before the possible dissolution of the Trust. Neither the Trust nor the
Board of Trustees shall be required to obtain any court order to deal with any
Trust Property or take any other action hereunder.
(j) The foregoing objects and purposes shall, except as otherwise
expressly provided, be in no way limited or restricted by reference to, or
inference from, the terms of any other clause of this or any other Article of
this Declaration of Trust, and shall each be regarded as independent and
construed as a power as well as an object and a purpose, and the enumeration of
specific purposes, objects and powers shall not be construed to limit or
restrict in any manner the meaning of general terms or the general powers of the
Trust now or hereafter conferred by the laws of the State of Delaware, nor shall
the expression of one thing be deemed to exclude another, though it be of like
nature, not expressed.
ARTICLE III.
SHARES
Section 1.DIVISION OF BENEFICIAL INTEREST.
(a) The beneficial interest in the Trust shall at all times be divided
into outstanding shares of the Trust, all without par value. The number of
shares of beneficial interest in the Trust authorized hereunder is unlimited.
(b) Subject to and except as otherwise provided in Section 23 of the
1940 Act, and the rules and regulations adopted thereunder, the Board of
Trustees shall have the power to issue authorized, but unissued, shares of
beneficial interest from time to time for such consideration paid wholly or
partly in cash or securities as may be determined from time to time by the Board
of Trustees, subject to any requirements or limitations of the 1940 Act. The
Board of Trustees, on behalf of the Trust, may acquire and hold as treasury
shares, reissue for such consideration and on such terms as it may determine, or
cancel, at its discretion from time to time, any Shares reacquired by the Trust.
(c) Each Share shall entitle the holder to the voting rights as
provided in Article V hereof.
(d) Shareholders shall be entitled to receive dividends and
distributions, when, if and as declared by the Board of Trustees. Dividends may
be paid in cash or in kind. No Share shall have any priority or preference over
any other Share with respect to dividends or distributions paid in the ordinary
course of business or distributions upon dissolution of the Trust made pursuant
to Article VIII, Section 2 hereof. All dividends and distributions from the
Trust Property shall be made ratably among all Shareholders according to the
number of Shares held of record by such Shareholders on the record date for any
dividend or distribution.
(e) Shareholders shall have no preemptive or other right to subscribe
for new or additional authorized, but unissued shares or other securities issued
by the Trust. The Board of Trustees may from time to time divide or combine the
Shares into a greater or lesser number of Shares. Any such division or
combination shall not materially change the proportionate beneficial interest in
Trust Property of Shareholders at the time of such division or combination.
(f) Any Trustee, officer or other agent of the Trust, and any
organization in which any such Person has an economic or other interest, may
acquire, own, hold and dispose of shares of beneficial interest in the Trust,
whether such shares are authorized but unissued, or already outstanding, to the
same extent as if such Person were not a Trustee, officer or other agent of the
Trust; and the Trust may issue and sell and may purchase such Shares from any
such Person or any such organization, subject to the limitations, restrictions
or other provisions applicable to the sale or purchase of such shares herein and
the 1940 Act.
Section 2. SALE OF SHARES. Subject to the 1940 Act and applicable law, the
Trust may sell its authorized but unissued shares of beneficial interest to such
Persons, at such times, on such terms, and for such consideration as the Board
of Trustees may from time to time authorize. Each sale shall be credited to the
individual purchaser's account in the form of full or fractional Shares, at the
net asset value per Share, subject to Section 23 of the 1940 Act, and the rules
and regulations adopted thereunder; PROVIDED, HOWEVER, that the Board of
Trustees may, in its sole discretion, permit the Principal Underwriter to impose
a sales charge upon any such sale. Every Shareholder by virtue of having become
a Shareholder shall be deemed to have expressly assented and agreed to the terms
of this Declaration of Trust and to have become bound as a party hereto.
Section 3. STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY. Shares
shall be deemed to be personal property giving to Shareholders only the rights
provided in this Declaration of Trust, the By-Laws and under applicable law.
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. The death, incapacity, dissolution,
termination, or bankruptcy of a Shareholder during the existence of the Trust
shall not operate to dissolve the Trust, nor entitle the representative of any
deceased, incapacitated, dissolved, terminated or bankrupt Shareholder to an
accounting or to take any action in court or elsewhere against the Trust or the
Trustees, but shall entitle such representative only to the rights, as a
Shareholder under this Declaration of Trust and the By-Laws, of said deceased,
incapacitated, dissolved, terminated or bankrupt Shareholder. 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 other
than such as the Shareholder may at any time personally agree to pay. Each
Share, when issued on the terms determined by the Board of Trustees, shall be
fully paid and nonassessable. As provided in the DSTA, Shareholders shall be
entitled to the same limitation of personal liability as that extended to
stockholders of a private corporation organized for profit under the General
Corporation Law of the State of Delaware.
Section 4. POWER OF BOARD OF TRUSTEES TO MAKE TAX STATUS ELECTION. The
Board of Trustees shall have the power, in its discretion, to make such
elections as to the tax status of the Trust as may be permitted or required
under the Code, without the vote of any Shareholder.
Section 5. SERIES AND CLASSES. The Board of Trustees may authorize the
division of Shares into separate classes of Shares and into separate and
distinct series of Shares and the division of any series into separate classes
of Shares. The establishment and designation of any series or class thereof
shall be effective, without the requirement of Shareholder approval, upon the
adoption of a resolution by not less than a majority of the then Board of
Trustees, which resolution shall set forth such establishment and designation
and may provide, to the extent permitted by the DSTA, for rights, powers and
duties of such series or class thereof otherwise than as provided herein. Each
such resolution shall be incorporated herein by reference upon adoption.
Section 6. INDEMNIFICATION OF SHAREHOLDERS. If any Shareholder or former
Shareholder shall be exposed to liability by reason of a claim or demand
relating exclusively to his or her being or having been a Shareholder and not
because of such Shareholder's actions or omissions, such Shareholder or former
Shareholder (or, in the case of a natural person, 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 Trust against all
loss and expense arising from such claim or demand; provided, however, such
indemnity shall not cover (i) any taxes due or paid by reason of such
Shareholder's ownership of any Shares and (ii) expenses charged to a Shareholder
pursuant to Article IV, Section 5 hereof.
ARTICLE IV.
THE BOARD OF TRUSTEES
Section 1. NUMBER, CLASSES AND ELECTION, TERM, REMOVAL AND RESIGNATION.
(a) The initial Board of Trustees shall be comprised of the Trustees
entering into this Declaration of Trust on the date first written above, who
shall hold office until the initial holder of a Share executes a consent in
writing to elect a Board of Trustees that is classified and holds office in
accordance with paragraph (c) of this Section 1. The initial Trustees shall (i)
execute and file or cause to be filed the Certificate of Trust with the office
of the Secretary of State of the State of Delaware and (ii) adopt the By-Laws.
Each Trustee shall execute a counterpart to this Declaration of Trust.
(b) The number of Trustees constituting the entire Board of Trustees
may be fixed from time to time by the vote of a majority of the then Board of
Trustees; PROVIDED, HOWEVER, that the number of Trustees shall in no event be
less than three (3) nor more than fifteen (15) and the percentage of Trustees
who are not Interested Persons of the Trust shall be no less than that permitted
by the 1940 Act. The number of Trustees shall not be reduced so as to shorten
the term of any Trustee then in office.
(c) The Board of Trustees (other than the initial Board of Trustees
established pursuant to paragraph (a) of this Section 1) shall be divided into
three (3) classes, with the term of office of one class expiring each year. Upon
the written consent of the initial Shareholder, Trustees of the first class
shall be elected to hold office for a term expiring at the next succeeding
annual meeting at the time such Trustees' successors are elected and qualified;
Trustees of the second class shall be elected to hold office for a term expiring
at the second succeeding annual meeting at the time such Trustees' successors
are elected and qualified; and Trustees of the third class shall be elected to
hold office for a term expiring at the third succeeding annual meeting at the
time such Trustees' successors are elected and qualified. Thereafter, at each
annual meeting of Shareholders, the successors to the class of Trustees whose
term shall then expire shall be elected to hold office for a term expiring at
the third succeeding annual meeting.
(d) Each Trustee shall hold office for the applicable term set forth
in paragraph (c) of this Section 1 or until such Trustee's earlier death,
resignation, removal or inability otherwise to serve.
(e) Any Trustee may be removed, with or without cause, by the
Shareholders, upon the vote of the holders of at least seventy-five percent
(75%) of the Shares entitled to vote.
(f) Any Trustee may resign at any time by giving written notice to the
secretary of the Trust or to a meeting of the Board of Trustees. Such
resignation shall be effective upon receipt, unless specified to be effective at
some later time, but no later than the next succeeding annual meeting of
Shareholders.
Section 2. TRUSTEE ACTION BY WRITTEN CONSENT WITHOUT A MEETING. Any action
that may be taken at any meeting of the Board of Trustees or any committee
thereof may be taken without a meeting and without prior written notice if a
consent or consents in writing setting forth the action so taken is signed by
the Trustees 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 Trustees on
the Board of Trustees or any committee thereof, as the case may be, were present
and voted. A consent transmitted by electronic transmission (as defined in the
DSTA) by a Trustee shall be deemed to be written and signed for purposes of this
Section. All such consents shall be filed with the secretary of the Trust and
shall be maintained in the Trust's records.
Section 3. POWERS; OTHER BUSINESS INTERESTS; QUORUM AND REQUIRED VOTE.
(a) POWERS. Subject to the provisions of this Declaration of Trust,
the business of the Trust shall be managed by or under the direction of the
Board of Trustees, and such Board of Trustees shall have all powers necessary or
convenient to carry out that responsibility. The Board of Trustees shall have
full power and authority to do any and all acts and to make and execute any and
all contracts and instruments that it may consider necessary or appropriate in
connection with the operation and administration of the Trust. The Board of
Trustees shall not be bound or limited by present or future laws or customs with
regard to investments by trustees or fiduciaries, but, subject to the other
provisions of this Declaration of Trust and the By-Laws, shall have full
authority and absolute power and control over the assets and the business of the
Trust to the same extent as if the Board of Trustees was the sole owner of such
assets and business in its own right, including such authority, power and
control to do all acts and things as it, in its sole discretion, shall deem
proper to accomplish the purposes of this Trust. Without limiting the foregoing,
the Board of Trustees may, subject to the requisite vote for such actions as set
forth in this Declaration of Trust and the By-Laws: (1) adopt By-Laws not
inconsistent with applicable law or this Declaration of Trust; (2) amend,
restate and repeal such By-Laws, subject to and in accordance with the
provisions of such By-Laws; (3) fill vacancies on the Board of Trustees in
accordance with this Declaration of Trust and the By-Laws; (4) elect and remove
such officers and appoint and terminate such agents as it considers appropriate,
in accordance with this Declaration of Trust and the By-Laws; (5) establish and
terminate one or more committees of the Board of Trustees pursuant to the
By-Laws; (6) place Trust Property in custody as required by the 1940 Act, employ
one or more custodians of the Trust Property and authorize such custodians to
employ sub-custodians and to place all or any part of such Trust property with a
custodian or a custodial system meeting the requirements of the 1940 Act; (7)
retain a transfer agent, dividend disbursing agent, a shareholder servicing
agent or administrative services agent, or any number thereof or any other
service provider as deemed appropriate; (8) provide for the issuance and
distribution of shares of beneficial interest in the Trust or other securities
or financial instruments directly or through one or more Principal Underwriters
or otherwise; (9) retain one or more Investment Adviser(s); (10) repurchase
Shares on behalf of the Trust and transfer Shares pursuant to applicable law;
(11) set record dates for the determination of Shareholders with respect to
various matters, in the manner provided in Article V, Section 4 of this
Declaration of Trust; (12) declare and pay dividends and distributions to
Shareholders from the Trust Property, in accordance with this Declaration of
Trust and the By-Laws; and (13) in general delegate such authority as it
considers desirable to any officer of the Trust, to any committee of the Trust
and to any agent or employee of the Trust or to any such custodian, transfer,
dividend disbursing, shareholder servicing agent, Principal Underwriter,
Investment Adviser, or other service provider, to the extent authorized and in
accordance with this Declaration of Trust, the By-Laws and applicable law. The
powers of the Board of Trustees set forth in this Section 3(a) are without
prejudice to the other powers of the Board of Trustees set forth in this
Declaration of Trust and the By-Laws. Any determination as to what is in the
best interests of the Trust and its Shareholders made by the Board of 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 Board of Trustees.
(b) OTHER BUSINESS INTERESTS. The Trustees shall devote to the affairs
of the Trust such time as may be necessary for the proper performance of their
duties hereunder, but neither the Trustees nor the officers, directors,
shareholders, partners or employees of the Trustees, if any, shall be expected
to devote their full time to the performance of such duties. The Trustees, or
any Affiliate, shareholder, officer, director, partner or employee thereof, or
any Person owning a legal or beneficial interest therein, may engage in, or
possess an interest in, any business or venture other than the Trust, of any
nature and description, independently or with or for the account of others.
Neither the Trust nor any Shareholder shall have the right to participate or
share in such other business or venture or any profit or compensation derived
therefrom.
(c) QUORUM AND REQUIRED VOTE. At all meetings of the Board of
Trustees, a majority of the Board of Trustees shall be present in person in
order to constitute a quorum for the transaction of business. A meeting at which
a quorum is initially present may continue to transact business notwithstanding
the departure of Trustees from the meeting, if any action taken is approved by
at least a majority of the required quorum for that meeting. Subject to Article
III, Sections 1 and 6 of the By-Laws and except as otherwise provided herein or
required by applicable law, the vote of not less than a majority of the Trustees
present at a meeting at which a quorum is present shall be the act of the Board
of Trustees.
Section 4. PAYMENT OF EXPENSES BY THE TRUST. An authorized officer of the
Trust shall pay or cause to be paid out of the principal or income of the Trust,
or partly out of the principal and partly out of the income of the Trust, all
expenses, fees, charges, taxes and liabilities incurred by or arising in
connection with the maintenance or operation of the Trust, or in connection with
the management thereof, including, but not limited to, the Trustees'
compensation and such expenses, fees, charges, taxes and liabilities associated
with the services of the Trust's officers, employees, Investment Adviser(s),
Principal Underwriter, auditors, counsel, custodian, sub-custodian, transfer
agent, dividend disbursing agent, shareholder servicing agent, and such other
agents or independent contractors and such other expenses, fees, charges, taxes
and liabilities as the Board of Trustees may deem necessary or proper to incur.
Section 5. PAYMENT OF EXPENSES BY SHAREHOLDERS. The Board of Trustees shall
have the power, as frequently as it may determine, to cause any Shareholder to
pay directly, in advance or arrears, for charges of the Trust's custodian or
transfer, dividend disbursing, shareholder servicing or similar agent for
services provided to such Shareholder, an amount fixed from time to time by the
Board of Trustees, by setting off such amount due from such Shareholder from the
amount of (i) declared but unpaid dividends or distributions owed such
Shareholder, or (ii) proceeds from the repurchase by the Trust of Shares from
such Shareholder pursuant to Article VI hereof.
Section 6. OWNERSHIP OF TRUST PROPERTY. Legal title to all of the Trust
Property shall at all times be vested in the Trust, except that the Board of
Trustees shall have the power to cause legal title to any Trust Property to be
held by or in the name of any Person as nominee, on such terms as the Board of
Trustees may determine, in accordance with applicable law.
Section 7. SERVICE CONTRACTS.
(a) Subject to this Declaration of Trust, the By-Laws and the 1940
Act, the Board of Trustees may, at any time and from time to time, contract for
exclusive or nonexclusive investment advisory or investment management services
for the Trust with any corporation, trust, association or other organization,
including any Affiliate; and any such contract may contain such other terms as
the Board of Trustees may determine, including without limitation, delegation of
authority to the Investment Adviser to determine from time to time without prior
consultation with the Board of Trustees what securities and other instruments or
property shall be purchased or otherwise acquired, owned, held, invested or
reinvested in, sold, exchanged, transferred, mortgaged, pledged, assigned,
negotiated, or otherwise dealt with or disposed of, and what portion, if any, of
the Trust Property shall be held uninvested and to make changes in the Trust's
investments, or to engage in such other activities, including administrative
services, as may specifically be delegated to such party.
(b) The Board of Trustees may also, at any time and from time to time,
contract with any Person, including any Affiliate, appointing it or them as the
exclusive or nonexclusive placement agent, distributor or Principal Underwriter
for the Trust's shares of beneficial ownership or for other securities or
financial instruments to be issued by the Trust, or appointing it or them to act
as the administrator, custodian, transfer agent, dividend disbursing agent
and/or shareholder servicing agent for the Trust.
(c) The Board of Trustees is further empowered, at any time and from
time to time, to contract with any Persons to provide such other services to the
Trust as the Board of Trustees determines to be in the best interests of the
Trust and its Shareholders.
(d) None of the following facts or circumstances shall affect the
validity of any of the following contracts or disqualify any Shareholder,
Trustee, employee or officer of the Trust from voting upon or executing the
same, or create any liability or accountability to the Trust or the
Shareholders, provided that the establishment of and performance of each such
contract is permissible under the 1940 Act, and provided further that such
Person is authorized to vote upon such contract under the 1940 Act:
(i) the fact that any of the Shareholders, Trustees,
employees or officers of the Trust is a shareholder, director, officer, partner,
trustee, employee, manager, Adviser, placement agent, Principal Underwriter,
distributor, or Affiliate or agent of or for any Person, or for any parent or
Affiliate of any Person, with which any type of service contract provided for in
this Article IV, Section 7 may have been or may hereafter be made, or that any
such Person, or any parent or Affiliate thereof, is a Shareholder or has an
interest in the Trust, or
(ii) the fact that any Person with which any type of service
contract provided for in this Article IV, Section 7 may have been or may
hereafter be made also has such a service contract with one or more other
Persons, or has other business or interests.
(e) Every contract referred to in this Section 7 is required to comply
with this Declaration of Trust, the By-Laws, the 1940 Act, other applicable law
and any stipulation by resolution of the Board of Trustees.
ARTICLE V.
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 1. VOTING POWERS. The Shareholders shall have the power to vote
only (i) for the election of Trustees and the filling of any vacancies on the
Board of Trustees as set forth herein and in the By-Laws; (ii) for the removal
of Trustees as set forth herein; (iii) on such additional matters as may be
required by this Declaration of Trust, the By-Laws, the 1940 Act, other
applicable law and any registration statement of the Trust filed with the
Commission, the registration of which is effective; and (iv) on such other
matters as the Board of Trustees may consider necessary or desirable. The
Shareholder of record (as of the record date established pursuant to Section 4
of this Article V) of each Share shall be entitled to one vote for each full
Share, and a fractional vote for each fractional Share. Shareholders shall not
be entitled to cumulative voting in the election of Trustees or on any other
matter.
Section 2. QUORUM AND REQUIRED VOTE.
(a) A majority of the Shares entitled to vote at a Shareholders'
meeting, which are present in person or represented by proxy, shall constitute a
quorum at the Shareholders' meeting, except when a larger quorum is required by
applicable law or the requirements of any securities exchange on which Shares
are listed for trading, in which case such quorum shall comply with such
requirements. Abstentions and broker non-votes will be included for purposes of
determining whether a quorum is present. Subject to any provision of this
Declaration of Trust, the By-Laws or applicable law that requires a different
vote: (1) in all matters other than the election of Trustees, the affirmative
"vote of a majority of the outstanding voting securities" (as defined herein) of
the Trust entitled to vote at a Shareholders' meeting at which a quorum is
present, shall be the act of the Shareholders; and (2) Trustees shall be elected
by not less than a plurality of the votes cast of the holders of Shares entitled
to vote present in person or represented by proxy at a Shareholders' meeting at
which a quorum is present.
(b) Abstentions and broker non-votes will be treated as votes present
at a Shareholders' meeting, but will not be treated as votes cast. Abstentions
and broker non-votes, therefore, will have no effect on proposals that require a
plurality or any percentage of votes cast, or of Shares present, for approval,
but will have the same effect as a vote "against" on proposals requiring any
percentage of the outstanding voting securities of the Trust for approval.
Section 3. 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 or consents in writing setting
forth the action so taken is signed by the holders of all Shares entitled to
vote on that action and is received by the secretary of the Trust. A consent
transmitted by electronic transmission (as defined in the DSTA) by a Shareholder
or by a person or persons authorized to act for a Shareholder shall be deemed to
be written and signed for purposes of this Section. All such consents shall be
filed with the secretary of the Trust and shall be maintained in the Trust's
records. Any Shareholder that has given a written consent or the Shareholder's
proxyholder or a personal representative of the Shareholder or its respective
proxyholder may revoke the consent by a writing received by the secretary of the
Trust before the written consents of all Shares entitled to vote have been
received by the secretary of the Trust.
Section 4. RECORD DATES.
(a) For purposes of determining the Shareholders entitled to notice
of, and to vote at, any meeting of Shareholders, the Board of Trustees may fix a
record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board of Trustees, and which
record date shall not be more than one hundred twenty (120) days nor less than
ten (10) days before the date of any such meeting. For purposes of determining
the Shareholders entitled to vote on any action without a meeting, the Board of
Trustees may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the Board of
Trustees, and which record date shall not be more than thirty (30) days after
the date upon which the resolution fixing the record date is adopted by the
Board of Trustees.
(b) If the Board of Trustees does not so fix a record date:
(i) the record date for determining Shareholders entitled to
notice of, and to vote at, a meeting of Shareholders shall be at the close of
business on the day next preceding the day on which notice is given or, if
notice is waived, at the close of business on the day next preceding the day on
which the meeting is held.
(ii) the record date for determining Shareholders entitled to
vote on any action by consent in writing without a meeting of Shareholders, (1)
when no prior action by the Board of Trustees has been taken, shall be the day
on which the first signed written consent setting forth the action taken is
delivered to the Trust, or (2) 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 adopts the resolution taking such prior action.
(c) For the purpose of determining the Shareholders who are entitled
to receive payment of any dividend or of any other distribution of assets of the
Trust, the Board of Trustees may from time to time fix a record date, which
record date shall not precede the date upon which the resolution fixing the
record date is adopted, and which record date shall not be more than sixty (60)
days before the date for the payment of such dividend or such other
distribution.
Section 5. ADDITIONAL PROVISIONS. The By-Laws may include further
provisions for Shareholders' votes, meetings and related matters.
ARTICLE VI.
NET ASSET VALUE; DISTRIBUTIONS; REPURCHASES; TRANSFERS
Section 1. DETERMINATION OF NET ASSET VALUE, NET INCOME AND DISTRIBUTIONS.
(a) The Board of Trustees shall have the power to determine from time
to time the offering price for authorized, but unissued, shares of beneficial
interest of the Trust, subject to any requirements or limitations of the 0000
Xxx.
(b) The Board of Trustees may, subject to the 1940 Act, prescribe and
shall set forth in the Bylaws, this Declaration of Trust or in a resolution of
the Board of Trustees such bases and time for determining the net asset value
per Share, or net income attributable to the Shares or the declaration and
payment of dividends and distributions on the Shares, as it may deem necessary
or desirable.
(c) Before payment of any dividend there may be set aside out of any
funds of the Trust available for dividends such sum or sums as the Board of
Trustees may from time to time, in its absolute discretion, think proper as a
reserve fund to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the Trust or for such other lawful
purpose as the Board of Trustees shall deem to be in the best interests of the
Trust and its Shareholders, and the Board of Trustees may abolish any such
reserve in the manner in which it was created.
Section 2. REPURCHASE OF SHARES WITH SHAREHOLDER CONSENT.
(a) The Trust may repurchase Shares on the open market or such Shares
as are tendered by any Shareholder for repurchase pursuant to a repurchase offer
or tender offer, if any, made by the Trust periodically or from time to time,
upon the presentation by the Shareholder of a proper instrument of transfer
together with a request directed to the Trust, its transfer agent or other duly
authorized agent, that the Trust repurchase such Shares, or in accordance with
such other procedures for repurchase as the Board of Trustees may from time to
time authorize; and the Trust will pay therefor a price that meets the
requirements of Section 23 of the 1940 Act, and the rules and regulations
adopted thereunder, and that is in accordance with the terms of such repurchase
offer, tender offer, this Declaration of Trust, the By-Laws and other applicable
law. The obligations set forth in this Section 2 are subject to the provision
that such obligations may be suspended or postponed by the Board of Trustees (1)
during any time the New York Stock Exchange (the "Exchange") is closed for other
than weekends or holidays; (2) if permitted by the rules of the Commission,
during periods when trading on the Exchange is restricted; or (3) during any
National Financial Emergency. The Board of Trustees may, in its discretion,
declare that the suspension relating to a National Financial Emergency shall
terminate, as the case may be, on the first business day on which the Exchange
shall have reopened or the period specified above shall have expired (as to
which, in the absence of an official ruling by the Commission, the determination
of the Board of Trustees shall be conclusive.)
(b) The repurchase price may in any case or cases be paid wholly or
partly in kind if the Board of Trustees determines that such payment is
advisable in the interest of the remaining Shareholders. 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 repurchase price shall be
determined by or under authority of the Board of Trustees. In no case shall the
Trust be liable for any delay of any corporation or other Person in transferring
securities or other property selected for delivery as all or part of any payment
in kind.
Section 3. REPURCHASE OF SHARES WITHOUT SHAREHOLDER CONSENT. The Trust
shall have the right at its option and at any time, subject to the 1940 Act and
other applicable law, to repurchase Shares of any Shareholder at a price that
meets the requirements of Section 23 of the 1940 Act, and the rules and
regulations adopted thereunder, and that is in accordance with the terms of this
Declaration of Trust, the By-Laws and other applicable law: (a) if at such time,
such Shareholder owns Shares having an aggregate net asset value of less than an
amount determined from time to time by the Trustees; or (b) to the extent that
such Shareholder owns Shares equal to or in excess of a percentage of the Shares
determined from time to time by the Trustees.
Section 4. TRANSFER OF SHARES. Shares shall be transferable in accordance
with the provisions of the By-Laws.
ARTICLE VII.
LIMITATION OF LIABILITY
AND INDEMNIFICATION OF AGENT
Section 1. LIMITATION OF LIABILITY.
(a) For the purpose of this Article, "Agent" means any Person who is
or was a Trustee, officer, employee or other agent of the Trust or is or was
serving at the request of the Trust as a trustee, director, officer, employee or
other agent of another foreign or domestic corporation, partnership, joint
venture, trust or other enterprise; "Proceeding" means any threatened, pending
or completed action or proceeding, whether civil, criminal, administrative or
investigative; and "Expenses" include without limitation attorneys' fees and any
expenses of establishing a right to indemnification under this Article.
(b) An Agent shall be liable to the Trust and to any Shareholder
solely for such Agent's own willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of such Agent (such
conduct referred to herein as "Disqualifying Conduct"), and for nothing else.
(c) Subject to subsection (b) of this Section 1 and to the fullest
extent that limitations on the liability of Agents are permitted by the DSTA,
the Agents shall not be responsible or liable in any event for any act or
omission of any other Agent of the Trust or any Investment Adviser or Principal
Underwriter of the Trust.
(d) No Agent, when acting in its respective capacity as such, shall be
personally liable to any Person, other than the Trust or a Shareholder to the
extent provided in subsections (b) and (c) of this Section 1, for any act,
omission or obligation of the Trust or any Trustee thereof.
(e) The officers and Trustees may obtain the advice of counsel or
other experts with respect to the meaning and operation of this Declaration of
Trust, the By-Laws, applicable law and their respective duties as officers or
Trustees. No such officer or Trustee shall be liable for any act or omission in
accordance with such advice and no inference concerning liability shall arise
from a failure to follow such advice. The officers and Trustees shall not be
required to give any bond hereunder, nor any surety if a bond is required by
applicable law.
(f) The failure to make timely collection of dividends or interest, or
to take timely action with respect to entitlements, on the Trust's securities
issued in emerging countries, shall not be deemed to be negligence or other
fault on the part of any Agent, and no Agent shall have any liability for such
failure or for any loss or damage resulting from the imposition by any
government of exchange control restrictions which might affect the liquidity of
the Trust's assets or from any war or political act of any foreign government to
which such assets might be exposed, except, in the case of a Trustee or officer,
for liability resulting from such Trustee's or officer's Disqualifying Conduct.
(g) The limitation on liability contained in this Article applies to
events occurring at the time a Person serves as an Agent whether or not such
Person is an Agent at the time of any Proceeding in which liability is asserted.
(h) No amendment or repeal of this Article shall adversely affect any
right or protection of an Agent that exists at the time of such amendment or
repeal.
Section 2. INDEMNIFICATION.
(a) INDEMNIFICATION BY TRUST. The Trust shall indemnify, out of Trust
Property, to the fullest extent permitted under applicable law, 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 or was an Agent of the Trust, against
Expenses, judgments, fines, settlements and other amounts actually and
reasonably incurred in connection with such Proceeding if such Person acted in
good faith or in the case of a criminal proceeding, had no reasonable cause to
believe the conduct of such Person was unlawful. The termination of any
Proceeding by judgment, order, settlement, conviction or plea of nolo contendere
or its equivalent shall not of itself create a presumption that the Person did
not act in good faith or that the Person had reasonable cause to believe that
the Person's conduct was unlawful.
(b) 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 the Agent's Disqualifying Conduct. 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 the Trust or the
Shareholders indemnification shall be made only to the extent that the court in
which that action was brought shall determine, upon application or otherwise,
that in view of all the circumstances of the case, that Person was not liable by
reason of that Person's Disqualifying Conduct.
(c) REQUIRED APPROVAL. Any indemnification under this Article shall be
made by the Trust if authorized in the specific case on a determination that
indemnification of the Agent is proper in the circumstances by a majority vote
of Trustees, even though such number of Trustees shall be less than a quorum,
who are not parties to the Proceeding and have no economic or other interest in
connection with such specific case; a committee of such Trustees designated by
majority vote of such Trustees even though such number of Trustees shall be less
than a quorum; or by independent legal counsel in a written opinion.
(d) ADVANCEMENT OF EXPENSES. Expenses incurred by an Agent in
defending any Proceeding may be advanced by the Trust before the final
disposition of the Proceeding on receipt of an undertaking by or on behalf of
the Agent to repay the amount of the advance if it shall be determined
ultimately that the Agent is not entitled to be indemnified as authorized in
this Article.
(e) OTHER CONTRACTUAL RIGHTS. Nothing contained in this Article shall
affect any right to indemnification to which Persons other than Trustees and
officers of the Trust or any subsidiary thereof may be entitled by contract or
otherwise.
(f) FIDUCIARIES OF EMPLOYEE BENEFIT PLAN. This Article 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 the Trust as defined in Section 1 of this
Article. Nothing contained in this Article shall limit any right to
indemnification to which such a trustee, investment manager, or other fiduciary
may be entitled by contract or otherwise which shall be enforceable to the
extent permitted by applicable law other than this Article.
Section 3. INSURANCE. To the fullest extent permitted by applicable law,
the Board of Trustees shall have the authority to purchase with Trust Property,
insurance for liability and for all Expenses reasonably incurred or paid or
expected to be paid by an Agent in connection with any Proceeding in which such
Agent becomes involved by virtue of such Agent's actions, or omissions to act,
in its capacity or former capacity with the Trust, whether or not the Trust
would have the power to indemnify such Agent against such liability.
Section 4. DERIVATIVE ACTIONS. Subject to the requirements set forth in
Section 3816 of the DSTA, a Shareholder or Shareholders may bring a derivative
action on behalf of the Trust only if the Shareholder or Shareholders first make
a pre-suit demand upon the Board of Trustees to bring the subject action unless
an effort to cause the Board of Trustees to bring such action is excused. A
demand on the Board of Trustees shall only be excused if a majority of the Board
of Trustees, or a majority of any committee established to consider the merits
of such action, has a material personal financial interest in the action at
issue. A Trustee shall not be deemed to have a material personal financial
interest in an action or otherwise be disqualified from ruling on a Shareholder
demand by virtue of the fact that such Trustee receives remuneration from his
service on the Board of Trustees of the Trust or on the boards of one or more
investment companies with the same or an affiliated investment advisor or
underwriter.
ARTICLE VIII.
APPROVAL OF CERTAIN TRANSACTIONS
Section 1. VOTE REQUIRED. Notwithstanding any other provision of the
Declaration of Trust to the contrary and subject to the exceptions provided in
this Article VIII, each of the transactions described in this Article VIII shall
require the approval of the Board of Trustees and the affirmative vote of the
holders of at least seventy-five percent (75%) of the Shares entitled to vote to
approve, adopt or authorize such transaction unless such action has been
previously approved, adopted or authorized by the affirmative vote of at least
two-thirds (66 2/3%) of the Board of Trustees, in which case the Shareholder
vote set forth in Article V, Section 2(a)(1) shall be required.
Section 2. DISSOLUTION. The Trust shall have perpetual existence unless
dissolved upon:
(a) The vote of the Board of Trustees and Shareholders as set forth in
Section 1 of this Article VIII; or
(b) Upon the occurrence of a dissolution or termination event pursuant
to any other provision of this Declaration of Trust (including Article VIII,
Section 3) or the DSTA.
(c) Upon dissolution of the Trust, the Trustees shall (in accordance
with Section 3808 of the DSTA) pay or make reasonable provision to pay all
claims and obligations of the Trust, including all contingent, conditional or
unmatured claims and obligations known to the Trust, and all claims and
obligations which are known to the Trust, but for which the identity of the
claimant is unknown. If the Trust has sufficient assets, such claims and
obligations shall be paid in full and any such provisions for payment shall be
made in full. If the Trust has insufficient assets, such claims and obligations
shall be paid or provided for according to their priority and, among claims and
obligations of equal priority, ratably to the extent of assets available
therefor. Any remaining assets of the Trust (including, without limitation,
cash, securities or any combination thereof) shall be distributed to the
Shareholders ratably according to the number of Shares held of record by the
several Shareholders on the record date for such dissolution distribution. Upon
the winding up of the Trust in accordance with Section 3808 of the DSTA and its
termination, any one (1) Trustee shall execute, and cause to be filed, a
certificate of cancellation, with the office of the Secretary of State of the
State of Delaware in accordance with the provisions of Section 3810 of the DSTA.
Section 3. MERGER OR CONSOLIDATION; CONVERSION; REORGANIZATION.
(a) MERGER OR CONSOLIDATION. Pursuant to an agreement of merger or
consolidation, the Board of Trustees may cause the Trust to merge or consolidate
with or into one or more statutory trusts or "other business entities" (as
defined in Section 3801 of the DSTA) formed or organized or existing under the
laws of the State of Delaware or any other state of the United States or any
foreign country or other foreign jurisdiction. Any such merger or consolidation
shall require approval by vote of the Board of Trustees and Shareholders as set
forth in Section 1 of this Article VIII. By reference to Section 3815(f) of the
DSTA, any agreement of merger or consolidation approved in accordance with this
Section 3(a) may, without a Shareholder vote, unless required by the 1940 Act or
the requirements of any securities exchange on which Shares are listed for
trading, effect any amendment to this Declaration of Trust or the By-Laws or
effect the adoption of a new governing instrument if the Trust is the surviving
or resulting statutory or business trust in the merger or consolidation, which
amendment or new governing instrument shall be effective at the effective time
or date of the merger or consolidation. In all respects not governed by the
DSTA, the 1940 Act or other applicable law, the Board of Trustees shall have the
power to prescribe additional procedures necessary or appropriate to accomplish
a merger or consolidation, including the power to create one or more separate
statutory or business trusts to which all or any part of the assets,
liabilities, profits or losses of the Trust may be transferred and to provide
for the conversion of Shares into beneficial interests in such separate
statutory or business trust or trusts. Upon completion of the merger or
consolidation, if the Trust is the surviving or resulting statutory or business
trust, any one (1) Trustee shall execute, and cause to be filed, a certificate
of merger or consolidation in accordance with Section 3815 of the DSTA.
(b) CONVERSION. The Board of Trustees may cause (i) the Trust to
convert to an "other business entity" (as defined in Section 3801 of the DSTA)
formed or organized under the laws of the State of Delaware as permitted
pursuant to Section 3821 of the DSTA; (ii) the Shares to be converted into
beneficial interests in another statutory or business trust created pursuant to
this Section 3 of this Article VIII, or (iii) the Shares to be exchanged under
or pursuant to any state or federal statute to the extent permitted by law. Any
such statutory conversion, Share conversion or Share exchange shall require
approval by vote of the Board of Trustees and Shareholders as set forth in
Section 1 of this Article VIII; PROVIDED, HOWEVER, that in all respects not
governed by the DSTA, the 1940 Act, other applicable law or the requirements of
any securities exchange on which Shares are listed for trading, the Board of
Trustees shall have the power to prescribe additional procedures necessary or
appropriate to accomplish a statutory conversion, Share conversion or Share
exchange, including the power to create one or more separate statutory or
business trusts to which all or any part of the assets, liabilities, profits or
losses of the Trust may be transferred and to provide for the conversion of
Shares into beneficial interests in such separate statutory or business trust or
trusts.
(c) REORGANIZATION. The Board of Trustees may cause the Trust to sell,
convey and transfer all or substantially all of the assets of the Trust to
another trust, statutory or business trust, partnership, limited partnership,
limited liability company, corporation or other association organized under the
laws of any state in exchange for cash, shares or other securities with such
sale, conveyance and transfer either (a) being made subject to, or with the
assumption by the transferee of, the liabilities of the Trust, or (b) not being
made subject to, or not with the assumption of, such liabilities. Such sale,
conveyance and transfer shall require approval by vote of the Board of Trustees
and Shareholders as set forth in Section 1 of this Article VIII. Following such
sale, conveyance and transfer, the Board of Trustees shall distribute such cash,
shares or other securities ratably among the Shareholders; and if all of the
assets of the Trust have been so sold, conveyed and transferred, the Trust shall
be dissolved. In all respects not governed by the DSTA, the 1940 Act or other
applicable law, the Board of Trustees shall have the power to prescribe
additional procedures necessary or appropriate to accomplish a sale of assets
including the power to create one or more separate statutory or business trusts
to which all or any part of the assets, liabilities, profits or losses of the
Trust may be transferred and to provide for the conversion of Shares into
beneficial interests in such separate statutory or business trust or trusts.
Section 4. RECLASSIFICATION OF THE TRUST. The Board of Trustees may cause
the Trust to be converted from a "closed-end company" to an "open-end company"
(as those terms are defined, respectively, in Sections 5(a)(2) and 5(a)(1) of
the 1940 Act). Such reclassification of the Trust shall require approval by vote
of the Board of Trustees and Shareholders as set forth in Section 1 of this
Article VIII.
ARTICLE IX.
AMENDMENTS
Section 1. AMENDMENTS GENERALLY. Subject to the provisions of Section 3(a)
of Article VIII and Section 2 of this Article IX, this Declaration of Trust may
be restated and/or amended at any time by the Board of Trustees, without
approval of the Shareholders. The Certificate of Trust shall be restated and/or
amended at any time by the Board of Trustees, without Shareholder approval, to
correct any inaccuracy contained therein. Any such restatement and/or amendment
of the Certificate of Trust shall be executed by at least one (1) Trustee and
shall be effective immediately upon its 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 2. SPECIAL AMENDMENTS. Notwithstanding any other provision of this
Declaration of Trust or the By-Laws, the amendment or repeal of Article IV,
Sections 1, 2 and 3, Article V, Article VII, Article VIII and this Article IX of
this Declaration of Trust shall require the approval of the Board of Trustees
and the affirmative vote of holders of at least two-thirds (66 2/3%) of the
Shares entitled to vote, unless such action has previously been approved,
adopted or authorized by the affirmative vote of at least two-thirds (66 2/3%)
of the Board of Trustees, in which case the Shareholder vote set forth in
Article V, Section 2(a)(1) shall be required.
ARTICLE X.
MISCELLANEOUS
Section 1. REFERENCES; HEADINGS; COUNTERPARTS. In this Declaration of Trust
and in any such restatements and/or amendments, references to this instrument,
and all expressions of similar effect to "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. Any references herein
to specific sections of the DSTA, the Code or the 1940 Act shall refer to such
sections as amended from time to time or any successor sections thereof. This
instrument may be executed in any number of counterparts, each of which shall be
deemed an original.
Section 2. APPLICABLE LAW. This 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 applicable provisions of the 1940 Act and the Code.
The Trust shall be a Delaware statutory trust pursuant to the DSTA, and without
limiting the provisions hereof, the Trust may exercise all powers that are
ordinarily exercised by such a statutory trust.
Section 3. PROVISIONS IN CONFLICT WITH LAW OR REGULATIONS.
(a) The provisions of this Declaration of Trust are severable, and if
the Board of Trustees shall determine, with the advice of counsel, that any of
such provisions is in conflict with the 1940 Act, the Code, the DSTA, or with
other applicable laws and regulations, the conflicting provision shall be deemed
not to have constituted a part of this Declaration of Trust from the time when
such provisions became inconsistent with such laws or regulations; PROVIDED,
HOWEVER, that such determination shall not affect any of the remaining
provisions of this Declaration of Trust or render invalid or improper any action
taken or omitted prior to such determination.
(b) If any provision of this 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 this Declaration of Trust in any jurisdiction.
Section 4. STATUTORY TRUST ONLY. It is the intention of the Trustees to
create hereby a statutory trust pursuant to the DSTA, and thereby to create the
relationship of trustee and beneficial owners within the meaning of the DSTA
between, respectively, the Trustees and each Shareholder. It is not the
intention of the Trustees to create a general or limited partnership, limited
liability company, joint stock association, corporation, bailment, or any form
of legal relationship other than a statutory trust pursuant to the DSTA. 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. USE OF THE NAMES "FRANKLIN" OR "XXXXXXXXX".
(a) The Board of Trustees expressly agrees and acknowledges that the
names "Franklin" and "Xxxxxxxxx" are the sole property of Franklin Resources,
Inc. ("FRI"). FRI has granted to the Trust a non-exclusive license to use such
names as part of the name of the Trust now and in the future. The Board of
Trustees further expressly agrees and acknowledges that the non-exclusive
license granted herein may be terminated by FRI if the Trust ceases to use FRI
or one of its Affiliates as Investment Adviser or to use other Affiliates or
successors of FRI for such purposes. In such event, the nonexclusive license may
be revoked by FRI and the Trust shall cease using the names "Franklin" and
"Xxxxxxxxx," or any name misleadingly implying a continuing relationship between
the Trust and FRI or any of its Affiliates, as part of its name unless otherwise
consented to by FRI or any successor to its interests in such names.
The Board of Trustees further understands and agrees that so long as
Franklin and/or any future advisory Affiliate of Franklin shall continue to
serve as the Trust's Investment Adviser, other registered closed- or open-end
investment companies ("funds") as may be sponsored or advised by Franklin or its
Affiliates shall have the right permanently to adopt and to use the names
"Franklin" and "Xxxxxxxxx" in their names and in the names of any series or
class of shares of such funds.
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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 the date first written above.
/s/XXXXXXX X. XXXXXXX /s/XXXXX X. HOLIDAY
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Xxxxxxx X. Xxxxxxx Xxxxx X. Holiday
/s/XXXXXX X. XXXXXX /s/XXXXX X. XXXXXXX
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Xxxxxx X. Xxxxxx Xxxxx X. Xxxxxxx
/s/XXXXXXXX X. XXXXX /s/XXXXXX X. XXXXXXX
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Xxxxxxxx X. Xxxxx Xxxxxx X. Xxxxxxx
/s/XXXXX X. XXXXXXXX /s/XXXX X. XXXXXXXX
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Xxxxx X. Xxxxxxxx Xxxx X. Xxxxxxxx
/s/S. XXXXXX XXXXXXXXX /s/XXXXX X. XXXXX
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S. Xxxxxx Xxxxxxxxx Xxxxx X. Xxxxx
/s/XXXXXX X. XXXXX, XX. /s/XXXXXXXXXXX X. XXXXXXXXXXXXX
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Xxxxxx X. Xxxxx, Xx. Xxxxxxxxxxx X. Xxxxxxxxxxxxx
