Exhibit (a)(1)
THIRD AVENUE VARIABLE SERIES TRUST
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AGREEMENT
AND DECLARATION OF TRUST
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June 16, 1999
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TABLE OF CONTENTS
ARTICLE I
The Trust
Section 1.1 Name..............................................................................2
Section 1.2 Definitions.......................................................................2
Section 1.3 Purpose and Powers of Trust.......................................................4
ARTICLE II
Trustees
Section 2.1 Number and Qualification..........................................................4
Section 2.2 Term and Election.................................................................4
Section 2.3 Resignation and Removal...........................................................5
Section 2.4 Vacancies.........................................................................5
Section 2.5 Meetings..........................................................................6
Section 2.6 Officers..........................................................................7
ARTICLE III
Powers and Duties of Trustees
Section 3.1 General...........................................................................7
Section 3.2 Investments.......................................................................8
Section 3.3 Legal Title.......................................................................8
Section 3.4 Issuance and Repurchase of Shares.................................................8
Section 3.5 Borrow Money or Utilize Leverage..................................................9
Section 3.6 Delegation; Committees. .........................................................9
Section 3.7 Collection and Payment. .........................................................9
Section 3.8 Expenses.........................................................................10
Section 3.9 By-Laws..........................................................................10
Section 3.10 Miscellaneous Powers.............................................................10
Section 3.11 Further Powers...................................................................11
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ARTICLE IV
Limitations of Liability and Indemnification
Section 4.1 No Personal Liability of Shareholders, Trustees, etc.............................11
Section 4.2 Mandatory Indemnification........................................................12
Section 4.3 No Duty of Investigation; Notice in Trust Instruments, etc.......................14
Section 4.4 Reliance on Experts, etc.........................................................14
ARTICLE V
Shares of Beneficial Interest
Section 5.1 Beneficial Interest..............................................................14
Section 5.2 Series Designation. ............................................................15
Section 5.3 Class Designation. .............................................................15
Section 5.4 Description of Shares............................................................16
Section 5.5 Rights of Shareholders. ........................................................17
Section 5.6 Trust Only.......................................................................18
Section 5.7 Issuance of Shares...............................................................18
Section 5.8 Register of Shares. ............................................................18
Section 5.9 Transfer of Shares...............................................................19
Section 5.10 Notices..........................................................................19
Section 5.11 Net Asset Value..................................................................20
Section 5.12 Distributions to Shareholders....................................................20
ARTICLE VI
Shareholders
Section 6.1 Meetings of Shareholders.........................................................20
Section 6.2 Voting...........................................................................21
Section 6.3 Notice of Meeting, Shareholder Proposals and Record Date.........................21
Section 6.4 Quorum and Required Vote.........................................................22
Section 6.5 Proxies, etc.....................................................................22
Section 6.6 Reports..........................................................................23
Section 6.7 Inspection of Records............................................................23
Section 6.8 Shareholder Action by Written Consent............................................23
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ARTICLE VII
Redemption
Section 7.1 Redemptions......................................................................24
Section 7.2 Disclosure of Holding............................................................24
Section 7.3 Redemptions of Small Accounts....................................................24
ARTICLE VIII
Duration: Termination of Trust; Amendment; Mergers, Etc.
Section 8.1 Duration.........................................................................25
Section 8.2 Termination......................................................................25
Section 8.3 Amendment Procedure..............................................................26
Section 8.4 Merger, Consolidation and Sale of Assets.........................................27
ARTICLE IX
Miscellaneous
Section 9.1 Filing...........................................................................28
Section 9.2 Resident Agent...................................................................28
Section 9.3 Governing Law....................................................................28
Section 9.4 Counterparts.....................................................................28
Section 9.5 Use of the Name "Third Avenue Variable Series Trust".............................29
Section 9.6 Reliance by Third Parties........................................................29
Section 9.7 Provisions in Conflict with Law or Regulation....................................29
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THIRD AVENUE VARIABLE SERIES TRUST
AGREEMENT
AND
DECLARATION OF TRUST
AGREEMENT AND DECLARATION OF TRUST made as of the 16th day of June,
1999, by the Trustees hereunder, and by the holders of shares of beneficial
interest issued hereunder as hereinafter provided.
WHEREAS, this Trust has been formed to carry on business as set forth
more particularly hereinafter;
WHEREAS, this Trust is authorized to issue an unlimited number of its
shares of beneficial interest in separate series and classes of each such
series, each separate series to be a sub-trust hereunder, all in accordance with
the provisions hereinafter set forth;
WHEREAS, the Trustees have agreed to manage all property coming into
their hands as Trustees of a Delaware business trust in accordance with the
provisions hereinafter set forth; and
WHEREAS, the parties hereto intend that the Trust created by this
Declaration and the Certificate of Trust filed with the Secretary of State of
the State of Delaware on June 16, 1999 shall constitute a business trust under
the Delaware Business Trust Statute and that this Declaration shall constitute
the governing instrument of such business trust.
NOW, THEREFORE, the Trustees hereby declare that they will hold all
cash, securities, and other assets which 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 of beneficial interest in this Trust or sub-trusts created
hereunder as hereinafter set forth.
ARTICLE I
THE TRUST
Section 1.1 NAME. This Trust shall be known as "Third Avenue Variable
Series Trust" and the Trustees shall conduct the business of the Trust under
that name or any other name or names as they may from time to time determine.
Section 1.2 DEFINITIONS. As used in this Declaration, the following
terms shall have the following meanings:
"BY-LAWS" shall mean the By-Laws of the Trust as amended from time to
time by the Trustees.
"CLASS" shall mean a portion of Shares of a Series of the Trust
established in accordance with Section 5.3 hereof.
"CODE" shall mean the Internal Revenue Code of 1986, as amended, and
the regulations promulgated thereunder.
"COMMISSION" shall mean the Securities and Exchange Commission.
"DECLARATION" shall mean this Agreement and Declaration of Trust, as
amended or amended and restated from time to time, including by way of any
classifying or reclassifying Shares of any Series or any Class of any such
Series or determining any designations, powers, preferences, voting, conversion
and other rights, limitations, qualifications and terms and conditions thereof.
"DELAWARE BUSINESS TRUST STATUTE" shall mean the provisions of the
Delaware Business Trust Act, 12 DEL. C. '3801, ET. SEQ., as such Act may be
amended from time to time.
"FUNDAMENTAL POLICIES" shall mean the investment policies and
restrictions set forth from time to time in any Prospectus of the Trust or any
Series that are expressly designated therein as fundamental policies of such
Series.
"INTERESTED PERSON" shall have the meaning ascribed thereto in the
1940 Act.
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"MAJORITY SHAREHOLDER VOTE" shall mean a vote of a "majority of the
outstanding voting securities" (as such term is defined in the 0000 Xxx) of the
Trust, any Series of the Trust or any Class thereof, as applicable.
The "1940 ACT" refers to the Investment Company Act of 1940 and the
rules and regulations promulgated thereunder and applicable exemptions
therefrom, as amended from time to time.
The "1933 ACT" refers to the Securities Act of 1933, and the
rules and regulations promulgated thereunder and applicable exemptions
therefrom, as amended from time to time.
"PERSON" shall mean and include natural persons, corporations,
partnerships, trusts, limited liability companies, associations, joint ventures
and other entities, whether or not legal entities, and governments and agencies
and political subdivisions thereof.
"PROSPECTUS" shall mean the current Prospectus of the Trust or of any
Series thereof or of any Class of any such Series, as applicable.
"SERIES" shall mean the separate sub-trusts that may be established
and designated as series pursuant to Section 5.2 hereof or any one of such
sub-trusts, as applicable.
"SHAREHOLDERS" shall mean as of any particular time the holders of
record of outstanding Shares of the Trust, any Series of the Trust or any Class
of any Series, as applicable, at such time.
"SHARES" shall mean the transferable units of beneficial interest into
which the beneficial interest in the Trust or in a Series of the Trust shall be
divided from time to time and includes fractions of Shares as well as whole
Shares, which Shares may be divided into Series and Classes. All references to
Shares shall be deemed to be Shares of any or all Series or Classes as the
context may require.
"TRUST" shall mean the trust established by this Declaration, as
amended from time to time, inclusive of each such amendment and every sub-trust
established as a Series hereunder.
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"TRUSTEES" shall mean the signatory to this Declaration, so long as
such signatory shall continue in office in accordance with the terms hereof, and
all other persons who at the time in question have been duly elected or
appointed and have qualified as trustees in accordance with the provisions
hereof and are then in office.
"TRUST PROPERTY" shall mean as of any particular time any and all
property, real or personal, tangible or intangible, which at such time is owned
or held by or for the account of the Trust or the Trustees in such capacity.
Section 1.3 PURPOSE AND POWERS OF TRUST. The Trust is established for
the purpose of engaging in any activity not prohibited by Delaware law and shall
have the power to engage in any such activity and in any activity incidental or
related to any such activity.
ARTICLE II
TRUSTEES
Section 2.1 NUMBER AND QUALIFICATION. Prior to any offering of Shares,
there may be a sole Trustee and thereafter the number of Trustees shall be such
number, not less than three or more than fifteen, as shall be set forth in a
written instrument signed or adopted by a majority of the Trustees then in
office. No reduction in the number of Trustees shall have the effect of removing
any Trustee from office prior to the expiration of his or her term. An
individual nominated as a Trustee shall be at least 21 years of age and not
older than such age as may be set forth in a written instrument signed or
adopted by not less than a majority of the Trustees then in office and shall not
be under legal disability. Trustees need not own Shares and may succeed
themselves in office.
Section 2.2 TERM AND ELECTION. Except for the Trustees appointed to
fill vacancies pursuant to Section 2.4 hereof, each Trustee shall be elected to
serve until death, resignation, removal, reelection by written ballot at the
annual meeting, if one is held, or at any special meeting. Subject to Section
2.4 hereof, each Trustee named herein or elected or appointed pursuant to the
terms hereof shall hold office until such Trustee's successor has been elected
at such meetings and has qualified to serve as Trustee. Election of Trustees at
a meeting shall be by the affirmative vote of the holders of a plurality of the
Shares present in person or by proxy. Each individ-
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ual elected or appointed as a Trustee of the Trust shall, unless otherwise
provided by such election or appointment, also thereby be elected or appointed,
as the case may be, as a Trustee of each Series of the Trust then in existence.
The election or appointment of any Trustee (other than an individual who was
serving as a Trustee immediately prior thereto) shall not become effective
unless and until such person shall have in writing accepted his election and
agreed to be bound by the terms of this Declaration.
Section 2.3 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 or mailed to the Chairman, if any, the President or
the Secretary and such resignation shall be effective upon such delivery, or at
a later date according to the terms of the instrument. Any Trustee may be
removed (provided the aggregate number of Trustees after such removal shall not
be less than the number required by Section 2.1 hereof) for cause at any time by
written instrument, signed by two-thirds of the remaining Trustees, specifying
the date when such removal shall become effective. Any Trustee may be removed
(provided the aggregate number of Trustees after such removal shall not be less
than the minimum number required by Section 2.1 hereof) without cause at any
time by a written instrument, signed or adopted by two-thirds of the remaining
Trustees or by vote of Shares having not less than two-thirds of the aggregate
number of Shares entitled to vote in the election of such Trustee, specifying
the date when such removal shall become effective. Upon the resignation or
removal of a Trustee, or such persons otherwise ceasing to be a Trustee, such
persons shall execute and deliver such documents as the remaining Trustees shall
require for the purpose of conveying to the Trust or the remaining Trustees any
Trust Property held in the name of the resigning or removed Trustee. Upon the
incapacity or death of any Trustee, such Trustee's legal representative shall
execute and deliver on such Trustee's behalf such documents as the remaining
Trustees shall require as provided in the preceding sentence.
Section 2.4 VACANCIES. The term of office of a Trustee shall terminate
and a vacancy shall occur in the event of the death, resignation, bankruptcy,
adjudicated incompetence or other incapacity to perform the duties of the
office, or removal, of a Trustee. Whenever a vacancy in the Board of Trustees
shall occur, the remaining Trustees may fill such vacancy by appointing an
individual having the qualifications described in this Article by a resolution
of a majority of the Trustees then in office or by election by the Shareholders,
or may leave such vacancy unfilled or may reduce the number of Trustees
(provided the aggregate number of Trustees after such reduction shall not be
less than the minimum number required by Section
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2.1 hereof). Any vacancy created by an increase in Trustees may be filled by the
appointment of an individual having the qualifications described in this Article
made by a resolution of a majority of the Trustees then in office or by election
by the Shareholders. No vacancy shall operate to annul this Declaration or to
revoke any existing agency created pursuant to the terms of this Declaration.
Whenever a vacancy in the number of Trustees shall occur, until such vacancy is
filled as provided herein, the Trustees in office, regardless of their number,
shall have all the powers granted to the Trustees and shall discharge all the
duties imposed upon the Trustees by this Declaration.
Section 2.5 MEETINGS. Meetings of the Trustees shall be held from time
to time upon the call of the Chairman, if any, the President, the Secretary or
any two Trustees. Regular meetings of the Trustees may be held without call or
notice at a time and place fixed by the By-Laws or by the Trustees. Notice of
any other meeting shall be mailed not less than 48 hours before the meeting or
otherwise actually delivered orally or in writing not less than 24 hours before
the meeting, but may be waived in writing by any Trustee either before or after
such meeting. The attendance of a Trustee at a meeting shall constitute a waiver
of notice of such meeting except where a Trustee attends a meeting for the
express purpose of objecting to the transaction of any business on the ground
that the meeting has not been lawfully called or convened. The Trustees may act
with or without a meeting. A quorum for all meetings of the Trustees shall be
one-third of the Trustees. Unless provided otherwise in this Declaration of
Trust, any action of the Trustees may be taken at a meeting by vote of a
majority of the Trustees present (a quorum being present) or without a meeting
by written consent of a majority of the Trustees or such other proportion as
shall be specified herein for action at a meeting at which all Trustees then in
office are present.
Any committee of the Trustees, including an executive committee, if
any, may act with or without a meeting. A quorum for all meetings of any such
committee shall be a majority of the members thereof. Unless provided otherwise
in this Declaration, any action of any such committee may be taken at a meeting
by vote of a majority of the members present (a quorum being present) or without
a meeting by written consent of a majority of the members or such other
proportion as shall be specified herein for action at a meeting at which all
committee members are present.
With respect to actions of the Trustees and any committee of the
Trustees, Trustees who are Interested Persons in any action to be taken may be
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counted for quorum purposes under this Section and shall be entitled to vote to
the extent not prohibited by the 1940 Act.
All or any one or more Trustees may participate in a meeting of the
Trustees or any committee thereof by means of a conference telephone, internet
connection or similar communications equipment by means of which all persons
participating in the meeting can hear or otherwise communicate with each other;
participation in a meeting pursuant to any such communications system shall
constitute presence in person at such meeting except as otherwise provided by
the 1940 Act.
Section 2.6 OFFICERS. The Trustees shall elect a Chief Executive
Officer, a President, a Secretary, a Treasurer and an Assistant Treasurer and
may elect a Chairman who shall serve at the pleasure of the Trustees or until
their successors are elected. The Trustees may elect or appoint or may authorize
the Chairman, if any, or President to appoint such other officers or agents with
such other titles and powers as the Trustees may deem to be advisable. A
Chairman shall, and the President, Secretary, Treasurer and Assistant Treasurer
may, but need not, be a Trustee.
ARTICLE III
POWERS AND DUTIES OF TRUSTEES
Section 3.1 GENERAL. The Trustees shall owe to the Trust and its
Shareholders the same fiduciary duties as owed by directors of corporations to
such corporations and their stockholders under the general corporation law of
the State of Delaware. The Trustees shall have exclusive and absolute control
over the Trust Property and over the business of the Trust or any Series thereof
to the same extent as if the Trustees were the sole owners of the Trust Property
and business in their own right, but with such powers of delegation as may be
permitted by this Declaration. The Trustees shall have power to engage in any
activity not prohibited by Delaware law. The enumeration of any specific power
herein shall not be construed as limiting the aforesaid power. The Trustees may
perform such acts as in their sole discretion are proper for conducting the
business of the Trust. The powers of the Trustees may be exercised without order
of or resort to any court. No Trustee shall be obligated to give any bond or
other security for the performance of any of his duties or powers hereunder.
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Section 3.2 INVESTMENTS. The Trustees shall have power to:
(a) manage, conduct, operate and carry on the business of an
investment company;
(b) subscribe for, invest in, reinvest in, purchase or
otherwise acquire, hold, pledge, sell, assign, transfer, exchange, distribute or
otherwise deal in or dispose of any and all sorts of property, tangible or
intangible, including but not limited to securities of any type whatsoever,
whether equity or non-equity, of any issuer, evidences of indebtedness of any
person and any other rights, interests, instruments or property of any sort and
to exercise any and all rights, powers and privileges of ownership or interest
in respect of any and all such investments of every kind and description,
including, without limitation, the right to consent and otherwise act with
respect thereto, with power to designate one or more Persons to exercise any of
said rights, powers and privileges in respect of any of said investments. The
Trustees shall not be limited by any law limiting the investments which may be
made by fiduciaries.
Section 3.3 LEGAL TITLE. Legal title to all the Trust Property shall
be vested in the Trust except that the Trustees shall have power to cause legal
title to any Trust Property to be held by or in the name of one or more of the
Trustees, or in the name of the Trust, or any Series thereof, or in the name of
any other Person as nominee, custodian or pledgee, on such terms as the Trustees
may determine, provided that the interest of the Trust or any Series thereof
therein is appropriately protected.
Section 3.4 ISSUANCE AND REPURCHASE OF SHARES. Subject to the
provisions of this Declaration and applicable law, the Trustees shall have the
power to issue, sell, repurchase, redeem, retire, cancel, acquire, hold, resell,
reissue, dispose of, transfer, and otherwise deal in, Shares, including Shares
in fractional denominations, shall have the power to establish from time to time
in accordance with the provisions of Section 5.2 and 5.3 hereof Series and
Classes representing interests in the Trust or a Series thereof and, subject to
the more detailed provisions set forth in Article VII, to apply to any such
repurchase, redemption, retirement, cancellation or acquisition of Shares any
funds or property of the applicable Series of the Trust whether capital or
surplus or otherwise, to the full extent now or hereafter permitted by the laws
of the State of Delaware governing business corporations.
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Section 3.5 BORROW MONEY OR UTILIZE LEVERAGE. The Trustees shall have
the power to borrow money or otherwise obtain credit or utilize leverage in
connection with the activities of the Trust to the maximum extent permitted by
law, regulation or order and the Fundamental Policies of any Series and to
secure the same by mortgaging, pledging or otherwise subjecting as security the
assets of the Trust or any Series thereof, including the lending of portfolio
securities, and to endorse, guarantee, or undertake the performance of any
obligation, contract or engagement of any other person, firm, association or
corporation; provided, however, that the assets of any particular Series shall
not be used as security for any credit extended solely to one or more other
Series.
Section 3.6 DELEGATION; COMMITTEES. The Trustees shall have power,
consistent with their continuing exclusive authority over the management of the
Trust and the Trust Property, to delegate from time to time to such of their
number or to officers, employees or agents of the Trust the doing of such things
and the execution of such instruments either in the name of the Trust or the
names of the Trustees or otherwise as the Trustees may deem expedient, to at
least the same extent as such delegation is permitted to directors of a Delaware
business corporation and is permitted by the 1940 Act, as well as any further
delegations the Trustees may determine to be desirable, expedient or necessary
in order to effect the purpose hereof. The Trustees may designate one or more
committees which shall have all or such lesser portion of the authority of the
entire Board of Trustees as the Trustees shall determine from time to time
except to the extent action by the entire Board of Trustees or particular
Trustees is required by the 1940 Act.
Section 3.7 COLLECTION AND PAYMENT. The Trustees shall have power to
collect all property due to the Trust or any Series of the Trust or any Class
thereof; to pay all claims, including taxes, against the Trust Property, the
Trust or any Series of the Trust or any Class thereof, the Trustees or any
officer, employee or agent of the Trust; to prosecute, defend, compromise or
abandon any claims relating to the Trust Property, the Trust or any Series of
the Trust or any Class thereof, or the Trustees or any officer, employee or
agent of the Trust; to foreclose any security interest securing any obligations,
by virtue of which any property is owed to the Trust or any Series of the Trust
or any Class thereof; and to enter into releases, agreements and other
instruments. Except to the extent required for a Delaware business corporation,
the Shareholders shall have no power to vote as to whether or not a court
action, legal proceeding or claim should or should not be brought or maintained
derivatively or as a class action on behalf of the Trust or the Shareholders.
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Section 3.8 EXPENSES. The Trustees shall have power to incur and pay
out of the assets or income of the Trust or any Series of the Trust or any Class
thereof, any expenses which in the opinion of the Trustees are necessary or
appropriate to carry out any of the purposes of this Declaration, and the
business of the Trust or any Series of the Trust or any Class thereof, 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. The Trustees may pay themselves such compensation for special
services, including legal, underwriting, syndicating and brokerage services, as
they in good faith may deem reasonable and reimbursement for expenses reasonably
incurred by themselves on behalf of the Trust. The Trustees shall have the
power, as frequently as they may determine, to cause each Shareholder, or each
Shareholder of any particular Series or Class thereof, to pay directly, in
advance or arrears, for charges of distribution, of the custodian or transfer,
shareholder servicing or similar agent of such Series or Class, a pro rata
amount as defined from time to time by the Trustees, by setting off such charges
due from such Shareholder from declared but unpaid dividends or distributions
owed such Shareholder and/or by reducing the number of shares in the account of
such Shareholder by that number of full and/or fractional Shares which
represents the outstanding amount of such charges due from such Shareholder.
Section 3.9 BY-LAWS. The Trustees may adopt and from time to time
amend or repeal By-Laws for the conduct of the business of the Trust. Such
By-Laws shall be binding on the Trust and the Shareholders unless inconsistent
with the provisions of this Declaration. The Shareholders shall not have
authority to adopt or amend By-Laws.
Section 3.10 MISCELLANEOUS POWERS. The Trustees shall have the power
to: (a) employ or contract with such Persons as the Trustees may deem desirable
for the transaction of the business of the Trust or any Series thereof,
including investment advisors, administrators, custodians, transfer agents,
shareholder services providers, accountants, counsel, brokers, dealers and
others; (b) enter into joint ventures, partnerships and any other combinations
or associations; (c) purchase, and pay for out of Trust Property, insurance
policies insuring the Shareholders, Trustees, officers, employees, agents,
investment advisors, distributors, selected dealers or independent contractors
of the Trust or any Series thereof against all claims arising by reason of
holding any such position or by reason of any action taken or omitted by any
such Person in such capacity, whether or not constituting negligence, or whether
or not the Trust would have the power to indemnify such
10
Person against such liability; (d) establish pension, profit-sharing, share
purchase, and other retirement, incentive and benefit plans for any Trustees,
officers, employees and agents of the Trust; (e) make donations, irrespective of
benefit to the Trust, for charitable, religious, educational, scientific, civic
or similar purposes; (f) to the extent permitted by applicable law, indemnify
any Person with whom the Trust or any Series thereof has dealings, including
without limitation any investment advisor, administrator, manager, transfer
agent, custodian, distributor or selected dealer, or any other person as the
Trustees may see fit 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 in 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 3.11 FURTHER POWERS. The Trustees shall have the power to
conduct the business of the Trust or any Series of the Trust or any Class
thereof and carry on its operations in any and all of its branches and maintain
offices both within and without the State of Delaware, in any and all states of
the United States of America, in the District of Columbia, and in any and all
commonwealths, territories, dependencies, colonies, possessions, agencies or
instrumentalities of the United States of America and of foreign governments,
and to do all such other things and execute all such instruments as they deem
necessary, proper or desirable in order to promote the interests of the Trust or
any Series of the Trust or any Class thereof although such things are not herein
specifically mentioned. Any determination as to what is in the interests of the
Trust or any Series of the Trust or any Class thereof 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.
ARTICLE IV
LIMITATIONS OF LIABILITY AND INDEMNIFICATION
Section 4.1 NO PERSONAL LIABILITY OF SHAREHOLDERS, TRUSTEES, ETC. No
Shareholder of the Trust shall be subject in such capacity to any personal
liability whatsoever to any Person in connection with Trust Property or the
acts, obligations or affairs of the Trust. Shareholders shall have the same
limitation of personal liability as is extended to stockholders of a private
corporation for profit incorporated under the general corporation law of the
State of Delaware. No Trustee, officer,
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employee or agent of the Trust or any Series of the Trust shall be subject in
such capacity to any personal liability whatsoever to any Person, other than the
Trust or the respective Series or the Shareholders, in connection with Trust
Property or the affairs of the Trust or the respective Series, save only
liability to the Trust or its Shareholders arising from bad faith, willful
misfeasance, gross negligence or reckless disregard for his duty to such Person;
and, subject to the foregoing exception, 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 or
officer, as such, of the Trust, is made a party to any suit or proceeding to
enforce any such liability, subject to the foregoing exception, he shall not, on
account thereof, be held to any personal liability.
Section 4.2 MANDATORY INDEMNIFICATION. (a) The Trust shall indemnify
the Trustees and officers of the Trust to the full extent permitted by law (each
such person being an "indemnitee") against any liabilities and expenses,
including amounts paid in satisfaction of judgments, in compromise or as fines
and penalties, and reasonable counsel fees reasonably incurred by such
indemnitee in connection with the defense or disposition of any action, suit or
other proceeding, whether civil or criminal, before any court or administrative
or investigative body in which he may be or may have been involved as a party or
otherwise (other than, except as authorized by the Trustees, as the plaintiff or
complainant) or with which he may be or may have been threatened, while acting
in any capacity set forth above in this Section 4.2 by reason of his having
acted in any such capacity, except with respect to any matter as to which he
shall not have acted in good faith in the reasonable belief that his action was
in the best interest of the Trust or the respective Series of the Trust or Class
thereof and furthermore, in the case of any criminal proceeding, as to which he
shall have had reasonable cause to believe that the conduct was unlawful,
provided, however, that no indemnitee shall be indemnified hereunder against any
liability to any person or any expense of such indemnitee arising by reason of
(i) willful misfeasance, (ii) bad faith, (iii) gross negligence (negligence in
the case of indemnitees that are affiliates of the Trust), or (iv) reckless
disregard of the duties involved in the conduct of his position. Notwithstanding
the foregoing, with respect to any action, suit or other proceeding voluntarily
prosecuted by any indemnitee as plaintiff, indemnification shall be mandatory
only if the prosecution of such action, suit or other proceeding by such
indemnitee was authorized by a majority of the Trustees.
(b) Notwithstanding the foregoing, no indemnification shall be
made hereunder unless there has been a determination (1) by a final decision on
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the merits by a court or other body of competent jurisdiction before whom the
issue of entitlement to indemnification hereunder was brought that such
indemnitee is entitled to indemnification hereunder or, (2) in the absence of
such a decision, by (i) a majority vote of a quorum of those Trustees who are
neither Interested Persons of the Trust nor parties to the proceeding
("Disinterested Non-Party Trustees"), that the indemnitee is entitled to
indemnification hereunder, or (ii) if such quorum is not obtainable or even if
obtainable, if such majority so directs, independent legal counsel in a written
opinion conclude that the indemnitee should be entitled to indemnification
hereunder. All determinations to make advance payments in connection with the
expense of defending any proceeding shall be authorized and made in accordance
with the immediately succeeding paragraph (c) below.
(c) The Trust shall make advance payments in connection with
the expenses of defending any action with respect to which indemnification might
be sought hereunder if the Trust receives a written affirmation by the
indemnitee of the indemnitee's good faith belief that the standards of conduct
necessary for indemnification have been met and a written undertaking to
reimburse the Trust unless it is subsequently determined that he is entitled to
such indemnification and if a majority of the Trustees determine that the
applicable standards of conduct necessary for indemnification appear to have
been met. In addition, at least one of the following conditions must be met: (1)
the indemnitee shall provide adequate security for his undertaking, (2) the
Trust shall be insured against losses arising by reason of any lawful advances,
or (3) a majority of a quorum of the Disinterested Non-Party Trustees, or if a
majority vote of such quorum so direct, independent legal counsel in a written
opinion, shall conclude, based on a review of readily available facts (as
opposed to a full trial-type inquiry), that there is substantial reason to
believe that the indemnitee ultimately will be found entitled to
indemnification.
(d) The rights accruing to any indemnitee under these
provisions shall not exclude any other right to which he may be lawfully
entitled.
(e) Notwithstanding the foregoing, subject to any limitations
provided by the 1940 Act and this Declaration, the Trust shall have the power
and authority to indemnify Persons providing services to the Trust to the full
extent provided by law as if the Trust were a corporation organized under the
Delaware General Corporation Law provided that such indemnification has been
approved by a majority of the Trustees.
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Section 4.3 NO DUTY OF INVESTIGATION; NOTICE IN TRUST INSTRUMENTS,
ETC. No purchaser, lender, transfer agent or other person dealing with the
Trustees or with any officer, employee or agent of the Trust or any Series of
the Trust or Class thereof shall be bound to make any inquiry concerning the
validity of any transaction purporting to be made by the Trustees or by said
officer, employee or agent or be liable for the application of money or property
paid, loaned, or delivered to or on the order of the Trustees or of said
officer, employee or agent. Every obligation, contract, undertaking, instrument,
certificate, Share, other security of the Trust or any Series of the Trust or
any Class thereof, and every other act or thing whatsoever executed in
connection with the Trust or any Series of the Trust or Class thereof shall be
conclusively taken 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. The Trustees may 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 liability, and such other insurance as the Trustees in their sole
judgment shall deem advisable or is required by the 1940 Act.
Section 4.4 RELIANCE ON EXPERTS, ETC. Each Trustee and officer or
employee of the Trust or any Series of the Trust shall, in the performance of
its duties, be fully and completely justified and protected with regard to any
act or any failure to act resulting from reliance in good faith upon the books
of account or other records of the Trust or any Series of the Trust or Class
thereof, upon an opinion of counsel, or upon reports made to the Trust or any
Series thereof by any of the Trust's officers or employees or by any advisor,
administrator, manager, distributor, selected dealer, accountant, appraiser or
other expert or consultant selected with reasonable care by the Trustees,
officers or employees of the Trust, regardless of whether such counsel or other
person 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 an unlimited number of shares of beneficial
interest, par value $.001 per share. All Shares issued in accordance with the
terms hereof, including, without limitation, Shares issued in connection with a
dividend in Shares
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or a split of Shares, shall be fully paid and nonassessable when the
consideration determined by the Trustees (if any) therefor shall have been
received by the Trust.
Section 5.2 SERIES DESIGNATION. The Trustees, in their discretion
from time to time, may authorize the division of Shares into one or more Series,
each Series relating to a separate portfolio of investments and each of which
Series shall be a separate and distinct subtrust of the Trust. Each Series so
established hereunder shall be deemed to be a separate trust under the
provisions of Delaware law. The Trustees shall have exclusive power without the
requirement of Shareholder approval to establish and designate such separate and
distinct Series and to fix and determine the relative rights and preferences as
between the different Series. The establishment and designation of any Series
shall be effective upon the execution by a majority of the Trustees of an
instrument setting forth the establishment and designation of such Series (or
when authorized to do so, by any officer of the Trust pursuant to the vote of a
majority of the Trustees of the Trust). Such instrument shall also set forth any
rights and preferences of such Series which are in addition to the rights and
preferences of Shares set forth in this Declaration. 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 or alter 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 5.3 CLASS DESIGNATION. The Trustees, in their discretion from
time to time, may authorize the division of Shares of the Trust or any Series
into one or more Classes of Shares all the assets of which shall be commingled
with the other Classes of such Series. The Trustees shall have exclusive power
without the requirement of Shareholder approval to establish and designate such
separate and distinct Classes and to fix and determine the relative rights,
terms, conditions and expenses applicable to each Class of Shares to the maximum
extent permitted by the 0000 Xxx. The establishment and designation of any Class
of Shares shall be effective upon the affirmative vote of a majority of the
Trustees of the Trust, including the Trustees who are not interested persons of
the Trust. At any time that there are no Shares outstanding of any particular
Class previously established and designated, the Trustees may, by the
affirmative vote of a majority of the Trustees, including a majority of the
Trustees who are not interested persons of the Trust, abolish or alter that
Class and the establishment and designation thereof.
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Section 5.4 DESCRIPTION OF SHARES. If the Trustees shall create
sub-trusts and divide the Shares into one or more Series or create Classes of
Shares, the following provisions shall be applicable:
(a) NUMBER OF SHARES. The number of Shares of each Series or
Class that may be issued shall be unlimited. The Trustees may classify or
reclassify any unissued Shares or any Shares previously issued and reacquired of
any Series or Class into one or more Series or Classes that may be established
and designated from time to time. The Trustees may hold as treasury Shares (of
the same or some other Series or Class), reissue for such consideration and on
such terms as they may determine, or cancel any Shares of any Series or Class
reacquired by the Trust at their discretion from time to time.
(b) INVESTMENT OF PROPERTY. The power of the Trustees to invest
and reinvest the Trust Property of each Series that may be established shall be
governed by Section 3.2 of this Declaration.
(c) ALLOCATION OF ASSETS. All consideration received by the
Trust for the issue or sale of Shares of a particular Series or Class, together
with all assets in which such consideration is invested or reinvested, all
income, earnings, profits, and proceeds thereof, including any proceeds derived
from the sale, exchange or liquidation of such assets, and any funds or payment
derived from any reinvestment of such proceeds in whatever form the same may be,
together with such Series' or Class's share of any assets of the Trust not
otherwise allocated to any particular Series or Class, shall be held by the
Trustees and Trust for the benefit of the Shareholders of such Series and,
subject to the rights of creditors of such Series only, shall irrevocably belong
to that Series for all purposes, and shall be so recorded upon the books of
account of the Trust. In the event that there are any assets, income, earnings,
profits, and proceeds thereof, funds or payments which are not readily
identifiable as belonging to any particular Series, the Trustees shall allocate
them among any one or more of the Series established and designated from time to
time in such manner and on such basis as they, in their sole discretion, deem
fair and equitable, and anything so allocated to a Series shall belong to such
Series. Each such allocation by the Trustees shall be conclusive and binding
upon the Shareholders of all Series for all purposes.
(d) ALLOCATION OF EXPENSES. The assets belonging to each
particular Series or attributable to each particular Class shall be charged with
the liabilities of the Trust in respect of that Series or Class and all
expenses, costs,
16
charges and reserves attributable to that Series or Class, and any general
liabilities, expenses, costs, charges or reserves of the Trust which are not
readily identifiable as belonging to any particular Series or attributable to
any particular Class shall be allocated and charged by the Trustees to and among
any one or more of the Series or Classes established and designated from time to
time in such manner and on such basis as the Trustees in their sole discretion
deem fair and equitable; PROVIDED that any incremental expenses allocated to one
or more Classes of Shares on a basis other than the relative net asset values of
the respective Classes shall be allocated in a manner consistent with the 1940
Act. Each allocation of liabilities, expenses, costs, charges and reserves by
the Trustees shall be conclusive and binding upon the Shareholders of all Series
and Classes for all purposes. The Trustees shall have full discretion, to the
extent not inconsistent with the 1940 Act, to determine which items shall be
treated as income and which items as capital, and each such determination and
allocation shall be conclusive and binding upon the Shareholders. Under no
circumstances shall the assets allocated or belonging to a particular Series or
attributable to a particular Class be charged with any liabilities attributable
to another Series or Class. Any creditor may look only to the assets of the
particular Series with respect to which such person is a creditor for
satisfaction of such creditor's debt.
(e) DIVIDENDS. The power of the Trustees to pay dividends and make
distributions with respect to any one or more Series shall be governed by
Section 5.12 of this Trust. Dividends and distributions on Shares of a
particular Series may be paid with such frequency as the Trustees may determine,
which may be daily or otherwise, pursuant to a standing resolution or
resolutions adopted only once or with such frequency as the Trustees may
determine, to the holders of Shares of that Series, from such of the income and
capital gains, accrued or realized, from the assets belonging to that Series, as
the Trustees may determine, after providing for actual and accrued liabilities
belonging to that Series. All dividends and distributions on each Class of a
Series shall be distributed pro rata to the holders of Shares of that Class in
proportion to the number of Shares of that Class held by such holders at the
date and time of record established for the payment of such dividends or
distributions, and such dividends and distributions need not be pro rata with
respect to dividends and distributions paid to Shares of any other Class of such
Series. Dividends and distributions shall be paid with respect to Shares of a
given Class only out of lawfully available assets attributable to such Class.
Section 5.5 RIGHTS OF SHAREHOLDERS. The Shares shall be personal
property giving only the rights in this Declaration specifically set forth. The
ownership of the Trust Property of every description and the right to conduct
any business
17
herein before described are vested exclusively in the Trustees, and the
Shareholders shall have no interest therein other than the beneficial interest
conferred by their Shares, with respect to a particular Series or Class and they
shall have no right to call for any partition or division of any property,
profits, rights or interests of the Trust nor can they be called upon to share
or assume any losses of the Trust or, subject to the right of the Trustees to
charge certain expenses directly to Shareholders, as provided in the last
sentence of Section 3.8, suffer an assessment of any kind by virtue of their
ownership of Shares. The Shares shall not entitle the holder to preference,
preemptive, appraisal, conversion or exchange rights (except as specified in
Section 8.4 or as specified by the Trustees in the designation or redesignation
of any Series or Class thereof).
Section 5.6 TRUST ONLY. It is the intention of the Trustees to create
only the relationship of Trustee and beneficiary between the Trustees and each
Shareholder from time to time. It is not the intention of the Trustees to create
a general partnership, limited partnership, joint stock association,
corporation, bailment or any form of legal relationship other than a trust.
Nothing in this Declaration shall be construed to make the Shareholders, either
by themselves or with the Trustees, partners or members of a joint stock
association.
Section 5.7 ISSUANCE OF SHARES. The Trustees, in their discretion,
may from time to time without the vote of the Shareholders issue Shares with
respect to any Series that may have been established pursuant to Section 5.2, 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 determine, and may in such manner acquire other assets
(including the acquisition of assets subject to, and in connection with the
assumption of, liabilities) and businesses. The Trustees may from time to time
divide or combine the Shares of any Series into a greater or lesser number
without thereby changing the proportionate beneficial interest in such Series of
the Trust. Issuances and redemptions of Shares may be made in whole Shares
and/or l/l,000ths of a Share or multiples thereof as the Trustees may determine.
Section 5.8 REGISTER OF SHARES. A register shall be kept at the Trust
or any transfer agent duly appointed by the Trustees under the direction of the
Trustees 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. Separate registers shall be established and maintained for each Series
of the Trust and each Class thereof. Each such register shall be conclusive as
to who are the
18
holders of the Shares of the applicable Series and Classes thereof 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 provided, until he or she has given his or her address to a transfer
agent or such other officer or agent of the Trustees as shall keep the register
for entry thereon. It is not contemplated that certificates will be issued for
the Shares; however, the Trustees, in their discretion, may authorize the
issuance of share certificates and promulgate appropriate fees therefore and
rules and regulations as to their use.
SECTION 5.9 TRANSFER OF SHARES. Shares shall be transferable on the
records of the Trust only by the record holder thereof or by its agent thereto
duly authorized in writing, upon delivery to the Trustees or a transfer agent of
the Trust 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 applicable 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 hereof 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 applicable register of Shares as the holder of
such Shares upon production of the proper evidence thereof to the Trustees or a
transfer agent of the Trust, but until such record is made, the Shareholder of
record shall be deemed to be the holder of such for all purposes hereof, and
neither the Trustees nor any transfer agent or registrar nor any officer or
agent of the Trust shall be affected by any notice of such death, bankruptcy or
incompetence, or other operation of law.
Section 5.10 NOTICES. Any and all notices to which any Shareholder
hereunder may be entitled and any and all communications to any Shareholder
shall be deemed duly served or given if mailed, postage prepaid, addressed to
any Shareholder of record at his or her last known address as recorded on the
applicable register of the Trust and may be sent together with any such notice
or other communication to another Shareholder at the same address.
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Section 5.11 NET ASSET VALUE. The value of the assets of the Trust or
any Series thereof, the amount of liabilities of the Trust or any Series thereof
and the net asset value of each outstanding Share of the Trust or any Series or
Class shall be determined at such time or times and on such days as the Trustees
may determine in accordance with the 1940 Act. The method of determination of
net asset value shall be determined by the Trustees. The power and duty to value
the assets and liabilities of the Trust and make net asset value determinations
and calculations may be delegated by the Trustees.
SECTION 5.12 DISTRIBUTIONS TO SHAREHOLDERS.
(a) The Trustees shall from time to time distribute among the
Shares such proportion of the net profits, surplus (including paid-in surplus),
capital, or assets held by the Trustees as they may deem proper or as may
otherwise be determined in the instrument setting forth the terms of such Shares
such Class or Series of Shares, which need not be ratable with respect to
distributions in respect of Shares of any other class or series thereof of the
Trust. Such distributions may be made in cash or property (including without
limitation any type of obligations of the Trust or any assets thereof) or any
combination thereof.
(b) Distributions may be made to the Shareholders of record
entitled to such distribution at the time such distribution is declared or at
such later date as shall be determined by the Trust prior to the date of
payment.
(c) The Trustees may always retain from any source such amount
as they may deem necessary to pay the debts or expenses of the Trust or to meet
obligations of the Trust, or as they otherwise may deem desirable to use in the
conduct of its affairs or to retain for future requirements or extensions of the
business of the Trust.
ARTICLE VI
SHAREHOLDERS
Section 6.1 MEETINGS OF SHAREHOLDERS. The Trust may, but shall not be
required to, hold annual meetings of the holders of any Class or Series of
Shares. An annual or special meeting of Shareholders may be called at any time
only by the Trustees; provided, however, that if May 31 of any year shall have
passed and the
20
Trustees shall not have called an annual meeting of Shareholders for such year,
the Trustees shall call a meeting for the purpose of voting on the removal of
one or more Trustees or the termination of any investment advisory agreement,
upon written request of holders of Shares of the Trust or a Series having in the
aggregate not less than a majority of the votes of the outstanding Shares of the
Trust entitled to vote on the matter or matters in question, such request
specifying the purpose or purposes for which such meeting is to be called. Any
meeting of Shareholders shall be held within or without the State of Delaware on
such day and at such time as the Trustees shall designate.
Section 6.2 VOTING. Shareholders shall have no power to vote on any
matter except matters on which a vote of Shares is required by applicable law,
this Declaration or resolution of the Trustees. Any matter required to be
submitted for approval of any of the Shares and affecting one or more Series or
Classes shall require approval by the required vote of Shares of the affected
Series or Class voting together as a single Series or Class and, if such matter
affects one or more Series or Class thereof differently from one or more other
Series or Class, approval by the required vote of Shares of such other Series or
Class voting as a separate Series or Class shall be required in order to be
approved with respect to such other Series or Class; provided, however, that
except to the extent required by the 1940 Act, there shall be no separate class
votes on the election or removal of Trustees or the selection of auditors for
the Trust. Shareholders of a particular Series shall not be entitled to vote on
any matter that affects the rights or interests of only one or more other
Series. There shall be no cumulative voting in the election or removal of
Trustees.
Section 6.3 NOTICE OF MEETING, SHAREHOLDER PROPOSALS AND RECORD DATE.
Notice of all meetings of Shareholders, stating the time, place and purposes of
the meeting, shall be given by the Trustees by mail to each Shareholder of
record entitled to vote thereat at its registered address, mailed at least 10
days before the meeting or otherwise in compliance with applicable law. Except
with respect to an annual meeting, at which any business required by the 1940
Act may be conducted, only the business stated in the notice of the meeting
shall be considered at such meeting. Subject to the provisions of applicable
law, any Shareholder wishing to include a proposal to be considered at an annual
meeting must submit such proposal to the Trust at least 30 days in advance of
such meeting. Any adjourned meeting may be held as adjourned one or more times
without further notice not later than 130 days after the record date. For the
purposes of determining the Shareholders who are entitled to notice of and to
vote at any meeting the Trustees may, without closing the transfer books, fix a
date not more than 100 days prior to the date of such meeting of
21
Shareholders as a record date for the determination of the Persons to be treated
as Shareholders of record for such purposes.
SECTION 6.4 QUORUM AND REQUIRED VOTE.
(a) The holders of one-third of the outstanding Shares of the
Trust on the record date present in person or by proxy shall constitute a quorum
at any meeting of the Shareholders for purposes of conducting business on which
a vote of all Shareholders of the Trust is being taken. The holders of one-third
of the outstanding Shares of one or more Series or one or more Classes on the
record date present in person or by proxy shall constitute a quorum at any
meeting of the Shareholders for purposes of conducting business on which a vote
of Shareholders of such Series or Series or Class or Classes is being taken.
Shares underlying a proxy as to which a broker or other intermediary states its
absence of authority to vote with respect to one or more matters shall be
treated as present for purposes of establishing a quorum for taking action on
any such matter only to the extent so determined by the Trustees at or prior to
the meeting of Shareholders at which such matter is to be considered.
(b) Subject to any provision of applicable law, this
Declaration or a resolution of the Trustees specifying or requiring a greater or
lesser vote requirement for the transaction of any matter of business at any
meeting of Shareholders, (i) the affirmative vote of a plurality of the Shares
entitled to vote for the election of any Trustee or Trustees shall be the act of
such Shareholders with respect to the election of such Trustee or Trustees, (ii)
the affirmative vote of a majority of the Shares present in person or
represented by proxy and entitled to vote on any other matter shall be the act
of the Shareholders with respect to such matter, and (iii) where a separate vote
of any Series is required on any matter, the affirmative vote of a majority of
the Shares of such Series present in person or represented by proxy and entitled
to vote on such matter shall be the act of the Shareholders of such Series with
respect to such matter.
Section 6.5 PROXIES, ETC. At any meeting of Shareholders, any holder
of Shares entitled to vote thereat may vote by proxy, provided that no proxy
shall be voted at any meeting unless it shall have been placed on file with the
Secretary, or with such other officer or agent of the Trust as the Secretary may
direct, for verification prior to the time at which such vote shall be taken.
Pursuant to a resolution of a majority of the Trustees, proxies may be solicited
in the name of one or more
22
Trustees or one or more of the officers or employees of the Trust. Only
Shareholders of record shall be entitled to vote. Each full Share shall be
entitled to one vote and each fractional Share shall be entitled to a vote equal
to its fraction of a full Share. When any Share is held jointly by several
persons, any one of them may vote at any meeting in person or by proxy in
respect of such Share, but if more than one of them shall be present at such
meeting in person or by proxy, and such joint owners or their proxies so present
disagree as to any vote to be cast, such vote shall not be received in respect
of such Share. A proxy purporting to be given by or on behalf of a Shareholder
of record on the record date for a meeting shall be deemed valid unless
challenged at or prior to its exercise, and the burden of proving invalidity
shall rest on the challenger. If the holder of any such Share is a minor or a
person of unsound mind, and subject to guardianship or to the legal control of
any other person as regards the charge or management of such Share, he or she
may vote by his or her guardian or such other person appointed or having such
control, and such vote may be given in person or by proxy. The Trustees shall
have the authority to make and modify from time to time regulations regarding
the validity of proxies. In addition to signed proxies, such regulations may
authorize facsimile, telephonic, internet and other methods of appointing a
proxy that are subject to such supervision by or under the direction of the
Trustees as the Trustees shall determine.
Section 6.6 REPORTS. The Trustees shall cause to be prepared and sent
to Shareholders at least annually and more frequently to the extent and in the
form required by law, regulation or any exchange on which Shares are listed a
report of operations containing financial statements of the Trust prepared in
conformity with generally accepted accounting principles and applicable law. It
is contemplated that separate reports may be prepared for the various Series.
Copies of such reports shall be mailed to all Shareholders of record of the
applicable Series within the time required by the 1940 Act, and in any event
within a reasonable period preceding the meeting of Shareholders.
Section 6.7 INSPECTION OF RECORDS. The records of the Trust shall be
open to inspection by Persons who have been holders of record of at least
$25,000 in net asset value or liquidation preference of Shares for a continuous
period of not less than six months to the same extent and for the same purposes
as is permitted under the Delaware General Business Corporation Law to
shareholders of a Delaware business corporation.
Section 6.8 SHAREHOLDER ACTION BY WRITTEN CONSENT. Any action which
may be taken by Shareholders by vote may be taken without a meeting if the
23
holders of all of the Shares entitled to vote thereon consent to the action in
writing and the written consents are filed with the records of the meetings of
Shareholders. Such consent shall be treated for all purposes as a vote taken at
a meeting of Shareholders.
ARTICLE VII
REDEMPTION
Section 7.1 REDEMPTIONS. All outstanding Shares of any Series of the
Trust may be redeemed at the option of the holders thereof, upon and subject to
the terms and conditions provided in this Article VII. The Trust shall, upon
application by any Shareholder or pursuant to authorization from any Shareholder
of a particular Series or Class, redeem or repurchase from such Shareholder
outstanding Shares of such Series or Class for an amount per share determined by
the application of a formula adopted for such purpose by the Trustees with
respect to such Series (which formula shall be consistent with the 1940 Act);
provided that (a) such amount per share shall not exceed any limitations imposed
under applicable law and (b) if so authorized by the Trustees, the Trust may, at
any time and from time to time, charge fees for effecting such redemption, at
such rates as the Trustees may establish, as and to the extent permitted under
the 1940 Act, and may, at any time and from time to time, pursuant to such Act,
suspend such right of redemption. The procedures for effecting redemption shall
be as set forth in the Prospectus with respect to the applicable Series or Class
from time to time. The proceeds of the redemption of Shares shall be paid in
cash or property (tangible or intangible) or any combination thereof in the sole
discretion of the Trust's investment advisor.
Section 7.2 DISCLOSURE OF HOLDING. The holders of Shares or other
securities of the Trust shall upon demand disclose to the Trustees in writing
such information with respect to direct and indirect ownership of Shares or
other securities of the Trust as the Trustees deem necessary to comply with the
provisions of the Code or any other applicable laws.
Section 7.3 REDEMPTIONS OF SMALL ACCOUNTS. The Trustees shall have
the power to redeem shares of any Series at a redemption price determined in
accordance with Section 7.1 above, (a) if at any time the total investment in
such account does not have a value of at least such minimum amount as may be
specified in the Prospectus for such Series from time to time, (b) as provided
by Section 3.8, or
24
(c) to the extent a Shareholder or other person beneficially owns Shares equal
to or in excess of a percentage of Shares of the Trust or any Series or Class
determined from time to time by the Trustees and specified in the applicable
Prospectus. In the event the Trustees determine to exercise their power to
redeem Shares provided in subsection (a) of this Section 7.3, the Shareholder
shall be notified that the value of his account is less than the applicable
minimum amount and shall be allowed 30 days to make an appropriate investment
before redemption is processed.
ARTICLE VIII
DURATION: TERMINATION OF TRUST; AMENDMENT; MERGERS, ETC.
Section 8.1 DURATION. Subject to termination in accordance with the
provisions of Section 8.2 hereof, the Trust created hereby shall have perpetual
existence.
Section 8.2 TERMINATION.
(a) The Trust or any Series may be dissolved by the affirmative
vote of a majority of the Trustees, and without any vote of the Shareholders
thereof, except as may be required by the 1940 Act. Upon the dissolution of the
Trust or any Series:
(1) The Trust or such Series shall carry on no business
except for the purpose of winding up its affairs.
(2) The Trustees shall proceed to wind up the affairs of
the Trust or such Series and all of the powers of the Trustees under
this Declaration shall continue until the affairs of the Trust or such
Series shall have been wound up, including the power to fulfill or
discharge the contracts of the Trust or such Series, collect its
assets, sell, convey, assign, exchange, merge where the Trust is not
the survivor, transfer or otherwise dispose of all or any part of the
remaining Trust Property to one or more Persons at a public or private
sale for consideration which may consist in whole or in part in 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,
merger in which the
25
Trust is not the survivor, transfer or other disposition of all or substantially
all the Trust Property of the Trust or any Series shall require approval of the
principal terms of the transaction and the nature and amount of the
consideration with the same vote as required for dissolution pursuant to
paragraph (a) above.
(3) 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 of the Trust or any Series, in cash or
in kind or partly in each, among the Shareholders of such Series according to
their respective rights.
(b) After the winding up and termination of the Trust or any
Series and distribution to the Shareholders as herein provided, a majority of
the Trustees shall execute and lodge among the records of the Trust an
instrument in writing setting forth the fact of such termination and shall
execute and file a certificate of cancellation with the Secretary of State of
the State of Delaware. Upon termination of the Trust, the Trustees shall
thereupon be discharged from all further liabilities and duties hereunder, and
the rights and interests of all Shareholders shall thereupon cease.
Upon termination of any Series, the Trustees shall thereunder be
discharged from all further liabilities and duties with respect to such Series,
and the rights and interests of all Shareholders of such Series shall thereupon
cease.
Section 8.3 AMENDMENT PROCEDURE.
(a) Subject to Section 8.3(b), this Declaration may be amended
in any respect by the affirmative vote of two-thirds of the Trustees and without
any vote of the Shareholders of the Trust or any Series or Class except as may
be required by the 1940 Act.
(b) 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. Expenses of the Trust charged directly to
Shareholders pursuant to Section 3.8 hereof or fees or sales charges payable
upon or in
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connection with redemptions of Shares pursuant to Section 7.1 hereof shall not
constitute "assessments" for purposes of this Section 8.3(b).
(c) An amendment duly adopted by the requisite vote of the
Board of Trustees and, if required, Shareholders as aforesaid, shall become
effective at the time of such adoption or at such other time as may be
designated by the Board of Trustees or Shareholders, as the case may be. A
certification signed by a majority of the Trustees setting forth an amendment
and reciting that it was duly adopted by the Trustees and, if required,
Shareholders 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 or at such other time
designated by the Board.
Notwithstanding any other provision hereof, until such time as Shares
are issued and outstanding, this Declaration may be terminated or amended in any
respect by the affirmative vote of a majority of the Trustees or by an
instrument signed by a majority of the Trustees.
Section 8.4 MERGER, CONSOLIDATION AND SALE OF ASSETS. The Trust or
any Series may merge or consolidate with any other corporation, association,
trust or other organization or any Series, sub-trust or other designated portion
thereof or may sell, lease or exchange all or substantially all of the Trust
Property or the property of any Series including its good will or may acquire
all or substantially all of the property of any other corporation, association,
trust or other organization or any series, sub-trust or other designated portion
thereof, upon such terms and conditions and for such consideration when and as
authorized by two-thirds of the Trustees and without any vote by the
Shareholders of the Trust or any Series or Class except as may be required by
the 1940 Act, and any such merger, consolidation, sale, lease, exchange or
purchase shall be determined for all purposes to have been accomplished under
and pursuant to the statutes of the State of Delaware.
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ARTICLE IX
MISCELLANEOUS
Section 9.1 FILING. This Declaration and any amendment (including any
supplement) hereto shall be filed in such places as may be required or as the
Trustees deem appropriate. Each amendment 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 shall, upon insertion in the Trust's minute book,
be conclusive evidence of all amendments contained therein. A restated
Declaration, containing the original Declaration and all amendments theretofore
made, may be executed from time to time by a majority of the Trustees and shall,
upon insertion in the Trust's minute book, be conclusive evidence of all
amendments contained therein and may thereafter be referred to in lieu of the
original Declaration and the various amendments thereto.
Section 9.2 RESIDENT AGENT. The Trust shall maintain a resident agent
in the State of Delaware, which agent shall initially be The Corporation Trust
Company, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000. The Trustees may
designate a successor resident agent, provided, however, that such appointment
shall not become effective until written notice thereof is delivered to the
office of the Secretary of the State.
Section 9.3 GOVERNING LAW. This Declaration is executed by a majority
of the Trustees for the purpose of creating a "business trust" under the
Delaware Business Trust Statue and establishing this Declaration as the
"governing instrument" of the Trust within the meaning of the Delaware Business
Trust Statue. The rights of all persons hereunder and the validity and
construction of every provision hereof shall be subject to and construed
according to the laws of said State of Delaware and reference shall be
specifically made to the business corporation law of the State of Delaware as to
the construction of matters not specifically covered herein or as to which an
ambiguity exists, although such law shall not be viewed as limiting the powers
otherwise granted to the Trustees hereunder and any ambiguity shall be viewed in
favor of such powers.
Section 9.4 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.
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Section 9.5 USE OF THE NAME "THIRD AVENUE VARIABLE SERIES TRUST". The
name "Third Avenue Variable Series Trust" and all rights to the use thereof
belong to EQSF Advisers, Inc., the investment adviser of the Trust. EQSF
Advisers, Inc. has consented to the use by the Trust of such name.
Section 9.6 RELIANCE BY THIRD PARTIES. Any certificate executed by an
individual who, according to the records of the Trust, or of any recording
office in which this Declaration may be recorded, appears to be a Trustee
hereunder, certifying to 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 Trust.
Section 9.7 PROVISIONS IN CONFLICT WITH LAW OR REGULATION.
(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 Code or with other applicable laws and regulations, the
conflicting provision shall be deemed never to have constituted a part of this
Declaration to the extent of such conflict; provided, however, that such
determination shall not affect any of the remaining provisions of this
Declaration or render invalid or improper any action taken or omitted prior to
such determination.
(b) If any provision of this Declaration shall be held invalid
or unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any manner
affect such provision in any other jurisdiction or any other provision of this
Declaration in any jurisdiction.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
By: /s/ XXX X. XXXXXXXXX
---------------------------
Name: Xxx X. Xxxxxxxxx
Title: Trustee
CERTIFICATE OF TRUST
OF
THIRD AVENUE VARIABLE SERIES TRUST
This certificate of Trust executed as of the 16th day of June, 1999
for the purpose of organizing a business trust pursuant to the Delaware Business
Trust Act, 12 Del. C. 3801 et seq. (the "Act").
The undersigned hereby certifies as follows:
1. NAME. The name of the business trust is: Third Avenue Variable
Series Trust (the "Trust").
2. REGISTERED INVESTMENT COMPANY. The Trust is or will become a
registered investment company under the Investment Company Act of 1940, as
amended.
3. REGISTERED OFFICE AND REGISTERED AGENT. The registered office of
the Trust in the State of Delaware is located at Corporation Trust Center, 0000
Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000. The name of the registered agent of
the Trust for service of process at such location is The Corporation Trust
Company.
4. NOTICE OF LIMITATION OF LIABILITIES OF SERIES. Notice is hereby
given that the Trust is or may hereafter be constituted a series trust. The
debts, liabilities, obligations and expenses incurred, contracted for or
otherwise existing with respect to any particular series shall be enforceable
against the assets of such series only, and not against the assets of the Trust
generally.
IN WITNESS WHEREOF, the undersigned, being the sole Trustee of the
Trust, has duly executed this Certificate of Trust as of the day and year first
above written.
/s/ Xxx X. Xxxxxxxxx
----------------------------------
Xxx X. Xxxxxxxxx, Trustee
