Exhibit (b)(1)(c)
NORTH AMERICAN FUNDS
AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST
NORTH AMERICAN FUNDS
AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST
TABLE OF CONTENTS
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ARTICLE I Name and Definitions Page
1.1 Name 1
1.2 Definitions 1
ARTICLE II Purpose of Trust 2
ARTICLE III The Trustees
3.1 Number, Designation, Election, Term, etc. 2
(a) Initial Trustee
(b) Number
(c) Election and Term
(d) Resignation and Retirement
(e) Removal
(f) Vacancies
(g) Effect of Death, Resignation, etc
(h) No Accounting
(i) Meetings
3.2 Powers of Trustees 4
(a) By-laws
(b) Sub-Trusts
(c) Officers, Agents, etc.
(d) Committees
(e) Advisory Boards
(f) Advise and Custody
(g) Transfer and Dividend Agents
(h) Distribution
(i) Record Dates
(j) Compensation
(k) Delegation
(l) Investments
(m) Disposition of Assets
(n) Ownership Powers
(o) Subscription
(p) Form of Holding
(q) Reorganization, etc.
(r) Voting Trusts, etc.
(s) Compromise
(t) Partnerships, etc.
(u) Borrowing and Security
(v) Guarantees, etc.
(w) Indemnification
(x) Insurance
(y) Pensions, etc.
(z) Minimum Total Investment
3.3 Certain Contracts 7
(a) Advisory
(b) Administration
(c) Distribution
(d) Custodian and Depository
(e) Transfer and Dividend Disbursing Agency
(f) Shareholder Servicing
(g) Accounting
3.4 Parties to Contracts 8
3.5 Payment of Trust Expenses and Compensation
of Trustees 8
3.6 Ownership of Assets of the Trust 9
ARTICLE IV Shares
4.1 Description of Shares 9
(a) Series of Shares and Sub-Trusts
(b) Classes of Shares
(c) Number and Issuance of Shares
4.2 Establishment and Designation of Sub-Trusts and Classes
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(a) Assets Belonging to Sub-Trusts
(b) Liabilities Belonging to Sub-Trusts
(c) Income and Capital
(d) Dividends and Distributions
(e) Liquidation
(f) Voting
(g) Redemption by Shareholder
(h) Redemption by Trust
(i) Net Asset Value
(j) Transfer
(k) Equality
(l) Fractions
(m) Conversion and Exchange Rights
4.3 Ownership of Shares 14
4.4 Investments in the Trust 14
4.5 No Preemptive Rights 14
4.6 Trust Only 14
4.7 Status of Shares and Limitation of Personal
Liability 14
ARTICLE V Shareholders' Voting Powers and Meetings
5.1 Voting Powers 15
5.2 Proxies 15
5.3 Meetings 15
5.4 Place of Meetings 16
5.5 Record Dates 16
5.6 Quorum and Required Vote 16
5.7 Action by Written Consent 16
5.8 Inspection of Records 16
5.9 Additional Provisions 16
ARTICLE VI Limitation of Liability; Indemnification
6.1 Trustees, Shareholders, etc. Not Personally
Liable; Notice 17
6.2 Trustee's Good Faith Action; Expert Advice;
No Bond or Surety 17
6.3 Indemnification of Shareholders 17
6.4 Indemnification of Trustees, Officers, etc. 18
6.5 Exceptions to Indemnification 18
6.6 Indemnification Not Exclusive, etc. 18
6.7 Liability of Third Persons Dealing with Trustee 19
ARTICLE VII Miscellaneous
7.1 Duration and Termination of Trust 19
7.2 Reorganization 19
7.3 Amendments 19
7.4 Resident Agent 20
7.5 Filing of Copies; References; Headings 20
7.6 Applicable Law 20
7.7 Reliance by Third Parties 20
7.8 Provisions in Conflict with Law or Regulations 21
7.9 Use of the Name "North American" 21
NORTH AMERICAN FUNDS
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AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST
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AGREEMENT AND DECLARATION OF TRUST, made at Boston, Massachusetts,
September 28,1988, establishing the North American Security Trust and amended on
June 1, 1993, is hereby amended and restated, this 18th day of February, 1994,
by the Trustees hereunder and by the holders of shares of beneficial interest
issued hereunder as hereinafter provided.
W I T N E S S E T H
WHEREAS, this Trust has been formed to carry on the business of an
investment company and exercise all powers necessary and appropriate to the
conduct of such operations;
WHEREAS, this Trust is authorized to issue its shares of beneficial
interest in separate series, each separate series to be a Sub-Trust hereunder,
all in accordance with the provisions hereinafter set forth; and
WHEREAS, the Trustees have agreed to manage all property coming
into their hands as trustees of a Massachusetts business trust in accordance
with the provisions hereinafter set forth;
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 in the Sub-Trusts created
hereunder as hereinafter set forth.
ARTICLE I
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NAME AND DEFINITIONS
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Section 1.1 Name. This Trust shall be known as "North American Funds", and
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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. Whenever used herein, unless otherwise required
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by the context or specifically provided:
(a) The "Trust" refers to the Massachusetts business trust
established by this Declaration of Trust, as amended from time to time,
inclusive of each and every Sub-Trust established hereunder.
(b) "Sub-Trust" refers to each Sub-Trust of the Trust established
and designated when the Trustees create each Series of Shares hereunder.
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(c) "Trustees" refers to the Trustees of the Trust and of each Sub-
Trust named herein so long as they shall continue in office and to all other
individuals who may from time to time be duly appointed or elected, qualified
and serving as Trustees in accordance with the provisions hereof, and reference
herein to a Trustee or the Trustees shall refer to each such individual in his
capacity as a trustee hereunder.
(d) "Shares" refers to the transferable units of interest into which
the beneficial interest in the Trust and each Sub-Trust (as the context may
require) shall be divided from time to time, and includes (i) fractions of
Shares as well as whole Shares and (ii) each separate class of Shares into which
each Sub-Trust shall be divided from time to time.
(e) "Series" refers to Series of Shares established and designated
under or in accordance with the provisions of Article IV, each of which Series
shall represent the beneficial interest in a Sub-Trust of the Trust.
(f) "Shareholder" means a record owner of Shares.
(g) The "1940 Act" refers to the Investment Company Act of 1940 and
the Rules and Regulations thereunder, all as amended from time to time.
(h) "Declaration of Trust" shall mean this Agreement and Declaration
of Trust as amended or restated from time to time.
(i) "By-Laws" shall mean the By-Laws of the Trust as amended from
time to time.
(j) "Affiliated Person", "Assignment", "Commission", "Interested
Person", "Majority Shareholder Vote" (the 67% or 50% requirement of the third
sentence of Section 2(a)(42) of the 1940 Act, whichever may be applicable) and
"Principal Underwriter" shall have the meanings given them in the 1940 Act, as
amended from time to time.
ARTICLE II
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PURPOSE OF TRUST
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The purpose of the Trust is to operate as an investment company and to
offer Shareholders one or more investment programs primarily in securities and
debt instruments.
ARTICLE III
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THE TRUSTEES
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Section 3.1 Number, Designation, Election, Term, etc.
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(a) Initial Trustee. Upon the execution of this Declaration of Trust or
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a counterpart hereof or some other writing in which he accepts such Trusteeship
and agrees to the provisions hereof, Xxxxxxx X. Xxxxxxxx, whose address is
000 Xxxxxxxxxx Xxxxxx, Xxxxxx, XX 00000, shall become a Trustee of the Trust and
of each Sub-Trust hereunder.
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(b) Number. The Trustees serving as such, whether named above or
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hereafter becoming a Trustee, may increase or decrease (to not less than three)
the number of Trustees to a number other than the number theretofore determined.
No decrease in the number of Trustees shall have the effect of removing any
Trustee from Office prior to the expiration of his term, but the number of
Trustees may be decreased in conjunction with the removal of a Trustee pursuant
to subsection (e) of this Section 3.1.
(c) Election and Term. The Trustees shall be elected by the
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Shareholders of the Trust at the first meeting of Shareholders. Each Trustee,
whether named above or hereafter becoming a Trustee, shall serve as a Trustee of
the Trust and of each Sub-Trust during the lifetime of this Trust and until its
termination as hereinafter provided except as such Trustee sooner dies, resigns,
retires or is removed, or becomes incapacitated to perform the duties of a
Trustee. Subject to Section 16(a) of the 1940 Act, the Trustees may elect
successor Trustees and may, pursuant to Section 3.1(f) hereof, appoint Trustees
to fill vacancies. Trustees need not own Shares.
(d) Resignation and Retirement. Any Trustee may resign his trust or
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retire as a Trustee, by written instrument signed by him and delivered to the
other Trustees or to the Chairman, if any, the President or Secretary of the
Trust, and such resignation or retirement shall take effect upon such delivery
or upon such later date as is specified in such instrument and shall be
effective as to the Trust and each Sub-Trust.
(e) Removal. Any Trustee may be removed with or without cause at any
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time: (i) by action of two-thirds of the Trustees prior to such removal; or
(ii) by vote of Shareholders holding not less than two-thirds of the Shares then
outstanding, cast in person or by proxy at any meeting called for the purpose.
Any such removal shall be effective as of the date of such action or such later
date as may be specified in such action and as to the Trust and each Sub-Trust.
(f) Vacancies. Any vacancy or anticipated vacancy resulting from any
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reason, including without limitation the death, resignation, retirement, removal
or incapacity of any of the Trustees, or resulting from an increase in the
number of Trustees by the other Trustees may (but so long as there are at least
three remaining Trustees, need not unless required by the 0000 Xxx) be filled by
a majority of the remaining Trustees, subject to the provisions of Section 16(a)
of the 1940 Act, through the appointment in writing of such other person as such
remaining Trustees in their discretion shall determine. Until a vacancy is
filled, the Trustees in office regardless of their number, shall have all the
powers granted to the Trustees and shall discharge all the duties imposed on the
Trustees by this Declaration of Trust. An appointment as Trustee shall be
effective upon the written acceptance of the person named therein to serve as a
Trustee and agreement by such person to be bound by the provisions of this
Declaration of Trust, except that any such appointment in anticipation of a
vacancy to occur by reason of retirement, resignation or increase in number of
Trustees to be effective at a later date shall become effective only at or after
the effective date of said retirement, resignation, or increase in number of
Trustees. As soon as any Trustee so appointed shall have accepted such
appointment and shall have agreed in writing to be bound by this Declaration of
Trust and the appointment is effective, the Trust estate shall vest in the new
Trustee, together with the continuing Trustees, without any further act or
conveyance.
(g) Effect of Death, Resignation, etc. The death, resignation,
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retirement, removal or incapacity of the Trustees, or any one of them, shall not
operate to annul or terminate the Trust or any Sub-Trust or to revoke or
terminate any existing agency or contract created or entered into pursuant to
the terms of this Declaration of Trust. When a Trustee ceases to be a Trustee,
his right title and interest in the assets of the Trust shall automatically
cease and vest in the remaining Trustees. Such cessation and vesting shall be
effective whether or not conveyancing documents have been executed and
delivered, but the individual (or his legal representative) shall execute and
deliver such documents as the remaining Trustees shall require for the purpose
of recording the conveyance to the remaining Trustees or the Trust of any trust
property held in the name of that individual.
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(h) No Accounting. Except to the extent required by law or under
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circumstances which would justify his removal for cause, no person ceasing to be
a Trustee as a result of his death, resignation, retirement, removal or
incapacity (nor the estate of any such person) shall be required to make an
accounting to the Shareholders or remaining Trustees upon such cessation.
(i) Meetings. Meetings of the Trustees shall be held from time to
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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 resolution of the
Trustees. Notice of any other meeting shall be mailed or otherwise given as
specified in the By-Laws. A quorum for all meetings of the Trustees shall be a
majority of the Trustees then in office. 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). Trustees
who are Interested Persons of the Trust within the meaning of Section 1.2 hereof
or otherwise interested in any action to be taken may be counted for quorum
purposes under this Section and shall be entitled to vote to the extent
permitted by the 1940 Act.
All or any one or more Trustees may participate in a meeting of the
Trustees by means of a conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear each other
and, subject to the 1940 Act, participating in a meeting pursuant to such
communications systems shall constitute presence in person at such meeting.
Unless provided otherwise in this Declaration of Trust, and subject to
the 1940 Act, any action that may be taken at a meeting by the Trustees may be
taken without a meeting by written consents of a majority of the Trustees then
in office.
Section 3.2 Powers of Trustees. Subject to the provisions of this
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Declaration of Trust, the business of the Trust shall be managed by the
Trustees, and they shall have all powers necessary or convenient to carry out
that responsibility and the purpose of the Trust. The Trustees shall have the
power to conduct the business of the Trust and carry on its operations in any
and all of its branches and maintain offices both within and without the
Commonwealth of Massachusetts, in any and all states of the United States of
America, in the District of Columbia, in any and all foreign countries and in
any and all commonwealths, territories, dependencies, colonies, possessions,
agencies or instrumentalities of the United States of America and of foreign
governments, and to do all such other things and execute all such instruments as
they deem necessary, proper or desirable in order to promote the interests of
the Trust although such things are not herein specifically mentioned. The
Trustees shall not in any way be bound or limited by any present or future law
or custom in regard to investments by trustees. Any determination as to what is
in the interests of the Trust made by the Trustees in good faith shall be
conclusive. In construing the provisions of this Declaration of Trust, the
presumption shall be in favor of a grant of power to the Trustees. The Trustees
will not be required to obtain any court order to deal with trust property.
Without limiting the foregoing, the Trustees may:
(a) By-Laws. Adopt By-Laws, not inconsistent with this Declaration
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of Trust, providing for the conduct of the business and affairs of the Trust and
may amend and repeal them to the extent that such By-Laws do not reserve that
right to the Shareholders;
(b) Sub-Trusts. From time to time in accordance with the provisions
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hereof, establish Sub-Trusts, each Sub-Trust to operate as a separate and
distinct investment medium and with separately defined investment objectives and
policies; allocate assets, liabilities and expenses of the Trust to a particular
Sub-Trust or apportion the same among two or more Sub-Trusts, provided that any
liabilities or
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expenses incurred or arising in connection with a particular Sub-Trust, as
determined by the Trustees, shall be payable solely out of the assets of that
Sub-Trust;
(c) Officers, Agents, etc. As they consider appropriate, elect and
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remove officers and appoint and terminate agents and consultants and hire and
terminate employees, any one or more of the foregoing of whom may be a Trustee,
and may provide for the compensation of all of the foregoing;
(d) Committees. Appoint from their own number, and terminate, any
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one or more committees consisting of two or more Trustees, including without
implied limitation an executive committee, which may, when the Trustees are not
in session and subject to the 1940 Act, exercise some or all of the power and
authority of the Trustees as the Trustees may determine; notice, quorum, voting
and other procedures for each committee shall be as determined by the Trustees
or, in the absence of such determination, shall be the same as the procedures
that apply to meetings and other proceedings of the Trustees;
(e) Advisory Boards. Appoint one or more advisory boards for the
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Trust or for one or more Sub-Trusts, the members of each of which shall not be
Trustees and need not be Shareholders;
(f) Advise and Custody. Employ one or more advisers, administrators,
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depositories and custodians and may authorize any depository or custodian to
employ domestic and foreign subcustodians or agents and to deposit all or any
part of such assets in one or more domestic or foreign systems for the central
handling of securities;
(g) Transfer and Dividend Agents. Retain transfer, dividend,
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accounting or Shareholder servicing agents or any of the foregoing;
(h) Distribution. Provide for the distribution of Shares by the
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Trust through one or more distributors, principal underwriters or otherwise;
(i) Record Dates. Set record dates or times for the determination of
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Shareholders or various of them with respect to various matters;
(j) Compensation. Compensate or provide for the compensation of the
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Trustees, officers, advisers, administrators, custodians, other agents,
consultants and employees of the Trust or the Trustees on such terms as they may
deem appropriate;
(k) Delegation. In general, delegate to any officer of the Trust, to
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any committee of the Trustees and to any employee, adviser, administrator,
distributor, depository, custodian, transfer and dividend disbursing agent, or
any other agent or consultant of the Trust such authority, powers, functions and
duties as they consider desirable or appropriate for the conduct of the business
and affairs of the Trust, including without implied limitation the power and
authority to act in the name of the Trust and of the Trustees, to sign documents
and to act as attorney-in-fact for the Trustees;
(l) Investments. Invest and reinvest cash and other property, and
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hold cash or other property uninvested;
(m) Disposition of Assets. Sell, exchange, lend, pledge, mortgage,
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hypothecate, write options on and lease any or all of the assets of the Trust;
(n) Ownership Powers. Vote or give assent, or exercise any rights of
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ownership with respect to stock or other securities, including debt instruments,
or other property; and execute and deliver proxies or powers of attorney to such
person or persons as the Trustees shall deem proper, granting to such
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person or persons such power and discretion with relation to securities or other
property as the Trustees shall deem proper;
(o) Subscription. Exercise powers and rights of subscription or
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otherwise which in any manner arise out of ownership of securities;
(p) Form of Holding. Hold any security or other property in a form
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not indicating any trust, whether in bearer, unregistered or other negotiable
form, or in the name of the Trustees or of the Trust or of any Sub-Trust or in
the name of a custodian, subcustodian or other depository or a nominee or
nominees or otherwise;
(q) Reorganization, etc. Consent to or participate in any plan for
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the reorganization, consolidation or merger of any corporation or issuer, any
security of which is or was held in the Trust; consent to any contract, lease,
mortgage, purchase or sale of property by such corporation or issuer; and pay
calls or subscriptions with respect to any security held in the Trust;
(r) Voting Trusts, etc. Join with other holders of any securities in
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acting through a committee, depository, voting trustee or otherwise, and in that
connection deposit any security with, or transfer any security to, any such
committee, depository or trustee, and delegate to them such power and authority
with relation to any security (whether or not so deposited or transferred) as
the Trustees shall deem proper, and agree to pay, and pay, such portion of the
expenses and compensation of such committee, depository or trustee as the
Trustees shall deem proper;
(s) Compromise. Compromise, prosecute, defend, arbitrate or
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otherwise adjust any claims, actions, suits, proceedings, or demands in favor of
or against the Trust or any Sub-Trust or class thereof on any matter in
controversy, including but not limited to claims for taxes;
(t) Partnerships, etc. Enter into joint ventures, general or limited
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partnerships and any other combinations or associations;
(u) Borrowing and Security. Borrow funds and mortgage and pledge the
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assets of the Trust or any part thereof to secure obligations arising in
connection with such borrowing;
(v) Guarantees, etc. Endorse or guarantee the payment of any notes
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or other obligations of any person; make contracts of guaranty or suretyship, or
otherwise assume liability for payment thereof; and mortgage and pledge the
Trust property or any part thereof to secure any of or all such obligations;
(w) Indemnification. To the extent permitted by law, indemnify any
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person with whom the Trust has dealings, including any investment adviser,
administrator, transfer agent, distributor, principal underwriter and selected
dealers to such extent as the Trustees shall determine;
(x) Insurance. Purchase and pay for entirely out of Trust property
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such insurance as they may deem necessary or appropriate for the conduct of the
business, including, without limitation, insurance policies insuring the assets
of the Trust and payment of distributions and principal on its portfolio
investments, and, subject to the 1940 Act, insurance policies insuring the
Shareholders, trustees, officers, employees, agents, consultants, investment
advisers, managers, administrators, distributors, principal underwriters, or
independent contractors, or any thereof (or any person connected therewith), of
the Trust individually against all claims and liabilities of every nature
arising by reason of holding or having held any such office or position, or by
reason of any action alleged to have been taken or omitted by any such person in
any such capacity, including any action taken or omitted that may be determined
to constitute negligence, whether or not the Trust would have the power to
indemnify such persons against such liability;
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(y) Pensions, etc. Pay pensions for faithful service, as deemed
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appropriate by the Trustees, and adopt, establish and carry out pension, profit-
sharing, share bonus, share purchase, savings, thrift and other retirement,
incentive and benefit plans, trust and provisions, including the purchasing of
life insurance and annuity contracts as a means of providing such retirement and
other benefits, for any or all of the Trustees, officers, employees and agents
of the Trust; and
(z) Minimum Total Investment. Establish, from time to time, a
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minimum total investment for Shareholders, and require redemption of the Shares
of any Shareholders whose investment is less than such minimum.
Section 3.3 Certain Contracts. Subject to compliance with the
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provisions of the 1940 Act, but not withstanding any limitations of any present
or future law or custom in regard to delegation of powers by trustees generally,
the Trustees may, at any time and from time to time and without limiting the
generality of their power and authority otherwise set forth herein, enter into
one or more contracts with any one or more corporations, trusts, associations,
partnerships, limited partnerships, other types of organizations, and
individuals, including North American Life Assurance Company and its affiliates
("Contracting Party"), to provide for the performance and assumption of
services, duties and responsibilities to, for or on behalf of the Trust, any
Sub-Trust and any classes thereof or the Trustees, including but not limited to
those set forth in paragraphs (a) to (g) below, as the Trustees may determine
appropriate.
(a) Advisory. Subject to the general supervision of the Trustees and
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in conformity with the stated policy of the Trustees with respect to the
investments of the Trust or of the assets belonging to any Sub-Trust of the
Trust, to manage such investments and assets, make investment decisions with
respect thereto, furnish statistical and research facilities and services, and
to place purchase and sale orders for portfolio transactions relating to such
investments and assets. The Trustees may, subject to applicable requirements of
the 1940 Act, including those related to Shareholder approval, authorize the
investment adviser to employ one or more subadvisers, from time to time, to
perform such of the acts and services of the investment adviser, and upon such
terms and conditions, as may be agreed upon between the investment adviser and
subadviser;
(b) Administration. Subject to the general supervision of the
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Trustees and in conformity with any policies of the Trustees with respect to the
operations of the Trust and each Sub-Trust, to supervise all or any part of the
operations of the Trust and each Sub-Trust, and to provide all or any part of
the administrative and clerical personnel, office space and office equipment and
services appropriate for the efficient administration and operations of the
Trust and each Sub-Trust;
(c) Distribution. To distribute the Shares of the Trust and each
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Sub-Trust and each class thereof, to be principal underwriter of such Shares,
and to act as agent of the Trust and each Sub-Trust in the sale of Shares and
the acceptance or rejection of orders for the purchase of Shares;
(d) Custodian and Depository. To act as a depository for and to
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maintain custody of property of the Trust and each Sub-Trust and accounting
records in connection therewith;
(e) Transfer and Dividend Disbursing Agency. To maintain records of
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the ownership of outstanding Shares, the issuance and redemption and the
transfer thereof, and to disburse any dividends declared by the Trustees and in
accordance with the policies of the Trustees and the instructions of any
particular Shareholder to reinvest any such dividends;
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(f) Shareholder Servicing. To provide service with respect to the
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relationship of the Trust and its Shareholders, records with respect to
Shareholders and their Shares, and similar matters; and
(g) Accounting. To handle all or any part of the accounting
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responsibilities, whether with respect to the Trust's properties, Shareholders
or otherwise.
Section 3.4 Parties to Contracts. The same person may be the
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Contracting Party for some or all of the services, duties and responsibilities
to, for and of the Trust and the Trustees, and the contracts with respect
thereto may contain such terms interpretive of or in addition to the delineation
of the services, duties and responsibilities provided for, including provisions
that are not inconsistent with the 1940 Act relating to the standard duty of and
the rights to indemnification of the Contracting Party and others, as the
Trustees may determine. Nothing herein shall preclude, prevent or limit the
Trust or a Contracting Party from entering into subcontractual arrangements
relative to any of the matters referred to in Sections 3.3(a) through (g)
hereof.
The fact that:
(a) any of the Shareholders, Trustees, or officers of the Trust
is a shareholder, director, officer, partner, trustee, employee, manager,
adviser, principal underwriter or distributor or agent of or for any Contracting
Party, or of or for any parent or affiliate of any Contracting Party or that the
Contracting Party or any parent or affiliate thereof is a Shareholder or has an
interest in the Trust or any Sub-Trust, or that
(b) any Contracting Party may have a contract providing for the
rendering of any similar services to one or more other corporations,
trusts, associations, partnerships, limited partnerships or other
organizations, or have other business or interests,
shall not affect the validity of any contract for the performance and assumption
of services, duties and responsibilities to, for or of the Trust or any Sub-
Trust or the Trustees or disqualify any Shareholder, Trustee or officer of the
Trust from voting upon or executing the same or create any liability or
accountability to the Trust, any Sub-Trust or Shareholders, provided that in the
case of any relationship or interest referred to in the preceding clause (a) on
the part of any Trustee or officer of the Trust either:
(c) the material facts as to such relationship or interest have been
disclosed to or are known by the Trustees not having any such relationship or
interest and the contract involved is approved in good faith by a majority of
such Trustees not having any such relationship or interest (even though such
unrelated or disinterested Trustees are less than a quorum of all the Trustees),
(d) the material facts as to such relationship or interest and as to
the contract have been disclosed to or are known by the Shareholders
entitled to vote thereon and the contract involved is specifically approved
in good faith by vote of the Shareholders, or
(e) the specific contract involved is fair to the Trust as of the
time it is authorized, approved or ratified by the Trustees or by the
Shareholders.
Section 3.5 Payment of Trust Expenses and Compensation of Trustees. The
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Trustees are authorized to pay or cause to be paid out of the principal or
income of the Trust or any Sub-Trust or classes thereof, or partly out of
principal and partly out of income, and to charge or allocate the same to,
between or among such one or more of the Sub-Trusts or classes thereof that may
be established and designated pursuant to Article IV, as the Trustees deem fair,
all expenses, fees, charges, taxes and
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liabilities incurred or arising in connection with the Trust or any Sub-Trust or
classes thereof or in connection with the management thereof, including, but not
limited to, the Trustees' compensation and such expenses and charges for the
services of the Trust's officers, employees, investment adviser, administrator,
distributor, principal underwriter, auditor, counsel, depository, custodian,
transfer agent, dividend disbursing agent, accounting agent, Shareholder
servicing agent, and such other agents, consultants, and independent contractors
and such other expenses and charges as the Trustees may deem necessary or proper
to incur; provided, however, that all expenses, fees, charges, taxes and
liabilities incurred or arising in connection with a particular Sub-Trust or
class thereof as determined by the Trustees, shall be payable solely out of the
assets of that Sub-Trust or class thereof. Without limiting the generality of
any other provision hereof, the Trustees shall be entitled to reasonable
compensation from the Trust for their services as Trustees and may fix the
amount of such compensation.
Section 3.6 Ownership of Assets of the Trust. Title to all of the assets
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of each Sub-Trust and of the Trust shall at all times be considered as vested in
the Trustees. No Shareholder shall be deemed to have a severable ownership in
any individual asset of the Trust or any Sub-Trust or any right of partition or
possession thereof, but each Shareholder shall have an undivided beneficial
interest in each Sub-Trust in which he is a Shareholder.
ARTICLE IV
----------
SHARES
------
Section 4.1 Description of Shares. The beneficial interest in the
---------------------
Trust shall be divided into Shares, par value $0.001 per share.
(a) Series of Shares and Sub-Trusts. The Trustees shall have the
-------------------------------
authority from time to time to divide the Shares into two or more Series of
Shares as they deem necessary of desirable. Each Series of Shares shall be a
separate and distinct Sub-Trust of the Trust. Each Sub-Trust established
hereunder shall be deemed to be a separate trust under Massachusetts General
Laws Chapter 182. The Trustees shall have exclusive power without the
requirement of shareholder approval to establish and designate such separate and
distinct Sub-Trusts, and to fix and determine the relative rights and
preferences as between the Shares of the separate Sub-Trusts as to purchase
price, right of redemption and the price, terms and manner of redemption,
special and relative rights as to dividends and other distributions and on
liquidation, sinking or purchase fund provisions, conversion rights, and
conditions under which the several Sub-Trusts shall have separate voting rights
or no voting rights.
Each Share of a Sub-Trust shall represent a beneficial interest only
in the assets belonging to that Sub-Trust, and such interest shall not extend to
the assets of any other Sub-Trust or to the assets of the Trust generally.
Shareholders of a particular Sub-Trust shall not be entitled to participate in a
derivative or class action on behalf of any other Sub-Trust or the Shareholders
of any other Sub-Trust.
The establishment and designation of any Sub-Trust in addition to
those established and designated in Section 4.2 shall be effective upon the
execution by a majority of the Trustees of an instrument setting forth such
establishment and designation and the relative rights and preferences of the
Shares of such Sub-Trust. At any time that there are no Shares outstanding of
any particular Sub-Trust previously established and designated, the Trustees may
by an instrument executed by a majority of their number abolish that Sub-Trust
and the establishment and designation thereof. Each instrument referred to in
this paragraph shall have the status of an amendment to this Declaration of
Trust.
9
Any Trustee, officer or other agent of the Trust, and any organization
in which any such person is interested, may acquire, own, hold and dispose of
Shares of any Sub-Trust to the same extent as if such person were not a Trustee,
officer or other agent of the Trust; the Trust may issue an sell or cause to be
issued and sold and may purchase Shares of any Sub-Trust from any such person or
any such organization subject only to the general limitations, restrictions or
other provisions applicable to the sale or purchase of Shares of such Sub-Trust
generally.
(b) Classes of Shares. The Trustees shall have the authority,
-----------------
without action or approval of the Shareholders, from time to time to divide the
Shares of any sub-Trust into classes and to fix and determine the different
rights and preferences as between the Shares of separate classes within a
particular Sub-Trust as to purchase price, right of redemption and the price,
terms and manner of redemption, dividends and other distributions and rights on
liquidation, conversion rights, voting rights and such other rights as the
Trustees may determine, and may designate the specific classes of shares of each
Sub-Trust. The fact that a Sub-Trust shall have initially been established and
designated without any specific establishment or designation of classes (i.e.,
----
that all Shares of such Sub-Trust are initially of a single class), or that a
Sub-Trust shall have more than one established and designated class, shall not
limit the authority of the Trustees to establish and designate separate classes,
or one or more further classes, of said Sub-Trust without approval of the
holders of the initial class thereof, or previously established and designated
class or classes thereof, provided that the establishment and designation of
such further separate classes would not adversely affect the rights of the
holders of the initial or previously established and designated class or classes
within the meaning of Section 77 of the Massachusetts General Laws Chapter 156B.
The division of Shares into classes and the terms and conditions pursuant to
which the Shares of the classes will be issued, must be made in compliance with
the 1940 Act. The establishment and designation of any class of Shares of a
Sub-Trust shall be effective upon the execution by a majority of the then
Trustees of an instrument setting forth such establishment and designation and
the relative rights and preferences of the Shares of such class. Each such
instrument shall have the status of an amendment to this Declaration of Trust.
(c) Number and Issuance of Shares. The number of authorized Shares
-----------------------------
is unlimited as is the number of Shares of each Sub-Trust and of each class that
may be issued. The Trustees may issue Shares of any Sub-Trust and of any class
for such consideration and on such terms as they may determine (or for no
consideration if pursuant to a Share dividend or split-up), all without action
or approval of the Shareholders. All Shares when so issued on the terms
determined by the Trustees shall be fully paid and non-assessable (but may be
subject to mandatory contribution back to the Trust as provided in subsection
(i) of Section 4.2). The Trustees may classify or reclassify any unissued
Shares or any Shares previously issued and reacquired into one or more Sub-
Trusts or classes thereof that may be established and designated from time to
time. The Trustees may hold as treasury shares, reissue for such consideration
and on such terms as they may determine, or cancel, at their discretion from
time to time, any Shares of any Sub-Trust or class thereof reacquired by the
Trust. The Trustees may from time to time divide or combine the shares of any
Series or any class into a greater or lesser number without thereby changing the
proportionate beneficial interest in the Series or class. The Trustees may from
time to time close the transfer books or establish record dates and time for the
purposes of determining the holders of Shares entitled to be treated as such, to
the extent provided or referred to in Section 5.5
Section 4.2 Establishment and Designation of Sub-Trusts and Classes.
-------------------------------------------------------
Without limiting the authority of the Trustees set forth in Section 4.1 to
establish and designate any further Sub-Trusts, the Trustees hereby establish
and designate ten Sub-Trusts:
1. Growth Fund
2. Investment Quality Bond Fund
3. Money Market Fund
10
4. Global Growth Fund
5. U.S. Government Securities Fund
6. Growth and Income Fund
7. Asset Allocation Fund
8. Strategic Income Fund
9. National Municipal Bond Fund
10. California Municipal Bond Fund
The Shares of these Sub-Trusts and any Shares of any further Sub-Trusts that may
from time to time be established and designated by the Trustees shall have the
relative rights and preferences described below in this Section 4.2; provided
that the Trustees may determine otherwise with respect to some further Sub-Trust
at the time of establishing and designating the same; and provided further that
the Trustees, in their absolute discretion, may amend any previously established
relative rights and preferences as they may deem necessary or desirable to
enable the Trust to comply with the 1940 Act or other applicable law.
(a) Assets Belonging to Sub-Trusts. All consideration received by the
------------------------------
Trust for the issue or sale of Shares of a particular Sub-Trust or classes
thereof, together with all assets in which such consideration is invested or
reinvested, all income, earnings, profits, and proceeds thereof, including any
proceeds derived from the sale, exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of such proceeds in whatever
form the same may be (collectively, "Specific Asset Items"), shall be held by
the Trustees in trust for the benefit of the holders of Shares of that Sub-Trust
and shall irrevocably belong to that Sub-Trust and be allocable to any classes
thereof 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 Sub-Trust (collectively, "General Asset Items), the
Trustees shall allocate such General Asset Items to and among any one or more of
the Sub-Trusts 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
any General Asset Items so allocated to a particular Sub-Trust shall belong to
that Sub-Trust and be allocable to any classes thereof. Each allocation of
assets by the Trustees shall be conclusive and binding upon the Shareholders of
all Sub-Trusts for all purposes. The Specific Asset Items of a Sub-Trust
together with any General Asset Items allocated to that Sub-Trust are herein
referred to as "assets belonging to" that Sub-Trust.
(b) Liabilities Belonging to Sub-Trusts. The assets belonging to each
-----------------------------------
particular Sub-Trust shall be charged with all the liabilities, expenses, costs,
charges and reserves which, as determined by the Trustees, are readily
identifiable as belonging to that particular Sub-Trust (collectively, "Specific
Liability Items"). Any general liabilities, expenses, costs, charges or
reserves of the Trust which are not readily identifiable as belonging to any
particular Sub-Trust (collectively, "General Liability Items") shall be
allocated and charged by the Trustees to and among any one or more of the Sub-
Trusts established and designated from time to time in such manner and on such
basis as the Trustees, in their sole discretion, deem fair and equitable. Each
allocation of liabilities, expenses, costs, charges and reserves by the Trustees
shall be conclusive and binding upon the Shareholders of all Sub-Trusts and of
all classes for all purposes. The Specific Liability Items of a Sub-Trust
together with any General Liability Items allocated to that Sub-Trust are herein
referred to as "liabilities belonging to" that Sub-Trust. General liabilities,
expenses, costs, charges or reserves being borne solely by a class of Shares or
pertaining
11
solely to a class of shares are herein referred to as "expenses being borne
solely" by a class. Expenses being borne solely by a particular class of Shares
may be allocable to, or borne by, only such class of Shares (as determined by
the Trustees). Under no circumstances shall the assets belonging to any
particular Sub-Trust or class be charged with the liabilities belonging to any
other Sub-Trust or class. All persons who have extended credit which the
Trustees have allocated to a particular Sub-Trust, or who have a claim or
contract which the Trustees have allocated to a particular Sub-Trust, shall look
only to the assets of that particular Sub-Trust for payment of such credit,
claim or contract.
(c) Income and Capital. 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.
(d) Dividends and Distributions. The Trustees shall from time to time
---------------------------
distribute ratably among the Shareholders of a Sub-Trust or class such
proportion of the net profits, surplus (including paid-in surplus), capital, or
assets held by the Trustees with respect to that Sub-Trust or class as they may
deem proper with any expenses being borne solely by a class of Shares of a Sub-
Trust being reflected in the net profits or other assets being distributed to
such class. Dividends and distributions 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. Distributions may be made in cash or property
(including without limitation any type of obligations of the Trust or any assets
thereof), and the Trustees may distribute ratably among the Shareholders
additional Shares issuable hereunder in such manner, at such times, and on such
terms as the Trustees deem proper. Such distributions may be among the
Shareholders of record at the time of declaring a distribution or among the
Shareholders of record at such later date as the Trustees shall determine. The
Trustees may always retain from the net profits of a Sub-Trust or class such
amount as they may deem necessary to pay the liabilities belonging to the Sub-
Trust or class or to meet obligations of the Sub-Trust or class, or as they may
deem desirable to use in the conduct of its affairs or to retain for future
requirements or extensions of the business. The Trustees may adopt and offer to
Shareholders such dividend reinvestment plans, cash dividend payout plans or
related plans as the Trustees shall deem appropriate.
Inasmuch as the computation of net income and gains for Federal income tax
purposes may vary from the computation thereof on the books, the above
provisions shall be interpreted to give the Trustees the power in their
discretion to distribute for any fiscal year as ordinary dividends and as
capital gains distributions, respectively, additional amounts sufficient to
enable the Trust and the Sub-Trusts to avoid or reduce liability for taxes.
(e) Liquidation. In the event of the liquidation or dissolution of the
-----------
Trust or of any Sub-Trust, the Shareholders of each affected Sub-Trust shall be
entitled to receive, when and as declared by the Trustees, the excess of the
assets belonging to that Sub-Trust over the liabilities belonging to that Sub-
Trust. The assets so distributable to the Shareholders of any particular Sub-
Trust shall be distributed among the Shareholders of each class according to
their respective rights taking into account the proper allocation of expenses
being borne solely by any class of Shares of that Sub-Trust.
(f) Voting. Shareholders shall be entitled to vote only with respect to
------
such matters as may be required by law, the Declaration of Trust or the By-Laws
and such additional matters as the Trustees may consider necessary or desirable.
On each matter submitted to a vote of the Shareholders, each holder of a Share
shall be entitled to one vote for each whole Share and to a proportionate
fractional vote for each fractional Share standing in his name on the books of
the Trust. All Shares of the Trust then entitled to vote shall be voted by Sub-
Trust, except that when voting for the election of Trustees and when otherwise
permitted by the 1940 Act, shares shall be voted in the aggregate and not by
Sub-Trust. As to any matter which does not affect the interest of a particular
Sub-Trust, only the holders of Shares of the one or more affected Sub-Trusts
shall be entitled to vote. As to any matter relating to expenses being
12
borne solely by a class of a Sub-Trust or to any other matter which only affects
the interests of a particular class of a particular Sub-Trust, only the holders
of Shares of the affected class of the Sub-Trust shall be entitled to vote.
(g) Redemption by Shareholder. Each holder of Shares of a particular Sub-
-------------------------
Trust or any class thereof shall have the right at such time as may be permitted
by the Trust to require the Trust to redeem all or any part of his Shares of
that Sub-Trust or class, subject to the terms and conditions set forth in this
Declaration of Trust and to such additional terms and conditions that may be
adopted by the Trustees. Shares of any particular Sub-Trust or class may be
redeemed solely out of the assets belonging to that Sub-Trust or class. Payment
of the redemption price shall be in cash; provided, however, that if the
Trustees determine, which determination shall be conclusive, that conditions
exist which make payment wholly in cash unwise or undesirable, the Trust may
make payment wholly or partly in securities or other assets belonging to the
Sub-Trust or class of which the Shares being redeemed are part at the value of
such securities or assets used in such determination of net asset value. The
amount per Share at which the Trust redeems or repurchases Shares shall be
determined by the application of a formula adopted for such purpose by
resolution of the Trustees (which formula shall be consistent with the 1940 Act)
provided that (i) such amount per Share shall not exceed the cash equivalent of
the proportionate interest of each Share in the assets of the particular Sub-
Trust or class at the time of the purchase or redemption and (ii) 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. The procedures
for effecting redemption with respect to a particular Sub-Trust shall be set
forth from time to time in the Prospectus for that Sub-Trust or class.
Notwithstanding the foregoing, the Trust may postpone payment of the redemption
price and may suspend the right of the holders of Shares of any Sub-Trust or
class to require the Trust to redeem Shares of that Sub-Trust or class during
any period or at any time when and to the extent permissible under the 1940 Act.
(h) Redemption by Trust. Each Share of each Sub-Trust and each class
-------------------
thereof is subject to redemption by the Trust at the redemption price determined
pursuant to subsection (g) of this Section 4.2: (i) at any time, if the
Trustees determine in their sole discretion that failure to so redeem may have
materially adverse consequences to the holders of the other Shares of the Trust
or any Sub-Trust or any classes thereof, or (ii) upon such other conditions as
may from time to time be determined by the Trustees and described in the then
current Prospectus for a Sub-Trust or class with respect to maintenance of
Shareholder accounts of a minimum amount in that Sub-Trust or class. Upon such
redemption the holders of the Shares so redeemed shall have no further right
with respect thereto other than to receive payment of such redemption price.
(i) Net Asset Value. The net asset value of a Sub-Trust or class shall be
---------------
the amount determined by subtracting the liabilities belonging or allocable to
that Sub-Trust or class from the assets belonging or allocable to that Sub-Trust
or class. The net asset value of each outstanding Share of each Sub-Trust or
class shall be determined at such time or times on such days as the Trustees may
determine in accordance with the 1940 Act. The method of determination of the
net asset value of a Sub-Trust or class shall be determined by the Trustees from
time to time and shall be as described in the Prospectus for that Sub-Trust or
class. The power and duty to make the daily calculations may be delegated by
the Trustees to the adviser, administrator, manager, custodian, transfer agent
or such other person as the Trustees may determine. The Trustees may suspend
the daily determination of net asset value to the extent permitted by the 1940
Act.
The Trustees may determine to maintain the net asset value per Share of any
Sub-Trust at a designated constant dollar amount and in connection therewith may
adopt procedures not inconsistent with the 1940 Act for the continuing
declarations of income attributable to that Sub-Trust as dividends payable in
additional Shares of that Sub-Trust at the designated constant dollar amount and
for the
13
handling of any losses attributable to that Sub-Trust. Such procedures may
provide that in the event of any loss each Shareholder shall be deemed to have
contributed to the capital of the Trust attributable to that Sub-Trust his pro
rata portion of the total number of Shares required to be canceled in order to
permit the net asset value per Share of that Sub-Trust to be maintained, after
reflecting such loss, at the designated constant dollar amount. Each Shareholder
of the Trust shall be deemed to have agreed, by his investment in any Sub-Trust
with respect to which the Trustees shall have adopted any such procedure, to
make the contribution referred to in the preceding sentence in the event of any
such loss.
(j) Transfer. All Shares shall be transferable, but transfers of Shares
--------
of a particular Sub-Trust or class will be recorded on the Share transfer
records of the Trust applicable to that Sub-Trust or class only at such times as
Shareholders shall have the right to require the Trust to redeem Shares of that
Sub-Trust or class and at such other times as may be permitted by the Trustees.
Shares shall be transferable on the records of the Trust upon delivery to the
Trust or its transfer agent of such evidence of assignment, transfer, succession
or authority to transfer as the Trustees or the transfer agent may reasonably
require, accompanied by any certificate or certificates representing such shares
previously issued to the transferor. Upon such delivery the transfer shall be
recorded on the books of the Trust. The Trust shall be entitled to treat the
record holder of Shares as shown on its books as the owner of such Shares for
all purposes, including the payment of dividends and the right to receive notice
and to vote with respect thereto, regardless of any transfer, pledge or other
disposition of such Shares until the Shares have been transferred on the books
of the Trust in accordance with the requirements of this Declaration of Trust.
(k) Equality. All Shares of each Sub-Trust shall represent an equal
--------
proportionate interest in the assets belonging to that Sub-Trust (subject to the
liabilities belonging to that Sub-Trust); provided that such equality need not
be maintained among all Shares of a Sub-Trust but shall be maintained among all
Shares of each class of that Sub-Trust whenever the Trustees divide the Shares
of the Sub-Trust into classes, with the expenses relating solely to the Shares
of a particular class being borne by, and reflected in the net asset value,
dividends and liquidation rights of, that class.
(l) Fractions. Any fractional Share of any class of any Sub-Trust, if any
---------
such fractional Share is outstanding, shall carry proportionately all the rights
and obligations of a whole Share of that class of that Sub-Trust, including
rights and obligations with respect to voting, receipt of dividends and
distributions, redemption of Shares, and liquidation of the Trust.
(m) Conversion and Exchange Rights. Subject to compliance with the
------------------------------
requirements of the 1940 Act, the Trustees shall have the authority to provide
that holders of Shares of any class of any Sub-Trust shall have the right to
convert such Shares into, or to exchange such Shares for, Shares of the same or
one or more other Sub-Trusts or classes thereof in accordance with such
requirements and procedures as may be established by the Trustees.
Section 4.3 Ownership of Shares. The ownership of Shares shall be
-------------------
recorded on the books of the Trust or of a transfer or similar agent for the
Trust. No certificates certifying the ownership of Shares need be issued except
as the Trustees may otherwise determine from time to time. The Trustees may
make such rules as they consider appropriate for the issuance of Shares
certificates, the use of facsimile signatures, the transfer of Shares and
similar matters. The record books of the Trust as kept by the Trust or any
transfer or similar agent, as the case may be, shall be conclusive for all
purposes as to who are the Shareholders and as to the number of Shares of each
class of each Sub-Trust held from time to time by each such Shareholder.
Section 4.4 Investments in the Trust. The Trustees may accept investments
------------------------
in the Trust and each Sub-Trust and class thereof, subject to any requirements
of law, from such persons and on such terms and for such consideration, as they
from time to time authorize. The Trustees may authorize any distributor,
principal underwriter, custodian, transfer agent or other person to accept
orders for the
14
purchase of Shares that conform to such authorized terms and to reject any
purchase orders for Shares whether or not conforming to such authorized terms.
Section 4.5 No Preemptive Rights. Shareholders shall have no preemptive
--------------------
or other rights to receive, purchase or subscribe to any additional Shares or
other securities issued by the Trust.
Section 4.6 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 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 4.7 Status of Shares and Limitation of Personal Liability. Shares
-----------------------------------------------------
shall be deemed to be personal property giving only the rights provided in this
instrument. Every Shareholder by virtue of having become a Shareholder shall be
held to have expressly assented and agreed to the terms hereof and to have
become a party hereto. The death of a Shareholder during the continuance of the
Trust shall not operate to terminate the Trust or any Sub-Trust or class thereof
nor entitle the representative of any deceased Shareholder to an accounting or
to take any action in court or elsewhere against the Trust or the Trustees, but
only to the rights of said decedent under this Trust. Ownership of Shares shall
not entitle the Shareholder to any title in or to the whole or any part of the
Trust property or right to call for a partition or division of the same or for
an accounting, nor shall the ownership of Shares constitute the Shareholders
partners. Neither the Trust nor the Trustees nor any officer, employee or agent
of the Trust shall have any power to bind personally any Shareholder nor, except
as specifically provided herein, to call upon any Shareholder for the payment of
any sum of money or assessment whatsoever other than such as the Shareholder may
at any time personally agree to pay.
ARTICLE V
---------
SHAREHOLDERS' VOTING POWERS AND MEETINGS
----------------------------------------
Section 5.1 Voting Powers. The Shareholders shall have power to vote
-------------
only (i) for the election or removal of Trustees as provided in Section 3.1,
(ii) with respect to any contract with a Contracting Party as provided in
Section 3.3 as to which Shareholder approval is contemplated by the 1940 Act,
(iii) with respect to any termination or reorganization of the Trust or any Sub-
Trust to the extent and as provided in Sections 7.1 and 7.2, (iv) with respect
to any amendment of the Declaration of Trust to the extent and as provided in
Section 7.3, (v) to the same extent as the stockholders of a Massachusetts
business corporation as to whether or not a court action, proceeding or claim
should or should not be brought or maintained derivatively or as a class action
on behalf of the Trust or any Sub-Trust thereof or the Shareholders (provided,
however, that a Shareholder of a particular Sub-Trust shall not be entitled to
bring, maintain or participate in a derivative or class action on behalf of any
other Sub-Trust (or Shareholder of any other Sub-Trust) of the Trust) and (vi)
with respect to such additional matters relating to the Trust as may be required
by the 1940 Act, other law, this Declaration of Trust, the By-Laws or any
registration of the Trust with the Commission (or any successor agency) or any
state, or as the Trustees may consider necessary or desirable. Only
Shareholders of record shall be entitled to vote. There shall be no cumulative
voting in the election of Trustees. Until Shares are issued, the Trustees may
exercise all rights of Shareholders and may take any action required by law,
this Declaration of Trust or the By-Laws to be taken by Shareholders.
15
Section 5.2 Proxies. At any meeting of Shareholders, any holder of
-------
Shares entitled to vote thereat may vote in person or 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 the Trustees, proxies may be
solicited in the name of one or more persons, including one or more Trustees or
one or more of the officers of the Trust. When any Shares are held in the names
of two or more persons, any one of them may vote at any meeting in person or by
proxy in respect of such Shares, 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 Shares. If the holder of any 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 Shares, he may vote by his
guardian or such other person appointed or having such control, and such vote
may be given in person or by proxy. A proxy purporting to be executed by or on
behalf of a Shareholder shall be deemed valid unless challenged at or prior to
its exercise, and the burden of proving invalidity shall rest on the challenger.
Section 5.3 Meetings. Meetings of Shareholders of the Trust or of
--------
any Sub-Trust or Sub-Trusts or classes thereof may be called by the Trustees (or
such other person or persons as may be specified in the By-Laws) from time to
time for the purpose of taking action upon any matter requiring the vote or
authority of such Shareholders as herein provided or upon any other matter
deemed by the Trustees to be necessary or desirable. Written notice of any
meeting of Shareholders shall be given at least seven days before such meeting.
If the Trustees (or such other person or persons as may be specified in the By-
Laws) fail to call or give notice of any meeting of Shareholders for 30 days
after written application by Shareholders holding at least 25% of the Shares
issued and outstanding, and entitled to vote at the meeting, requesting a
meeting be called for a purpose requiring action by the Shareholders as provided
herein or in the By-Laws, then Shareholders holding at least 25% of the Shares
then outstanding may call and give notice of such meeting, and thereupon the
meeting shall be held in the manner provided for herein in case of call thereof
by the Trustees.
Section 5.4 Place of Meetings. All meetings of the Shareholders
-----------------
shall be held at the principal office of the Trust or at such other place within
the United States as shall be designated by the Trustees or the President of the
Trust.
Section 5.5 Record Dates. For the purpose of determining the
------------
Shareholders who are entitled to notice of and to vote or act at any meeting or
any adjournment thereof, or who are entitled to participate in any dividend or
distribution, or for the purpose of any other action, the Trustees may from time
to time close the transfer books for such period, not exceeding 30 days (except
at or in connection with the termination of the Trust), as the Trustees may
determine; or without closing the transfer books, the Trustees may fix a date
and time not more than 60 days prior to the date of any meeting of Shareholders
or other action as the date and time of record for the determination of
Shareholders entitled to notice of and to vote at such meeting or any
adjournment thereof or to be treated as Shareholders of record for purposes of
such other action, and any Shareholder who was a Shareholder at the date and
time so fixed shall be entitled to vote at such meeting or any adjournment
thereof or to be treated as a Shareholder of record for purposes of such other
action, even though he has since that date and time disposed of his Shares, and
no Shareholder becoming such after that date and time shall be so entitled to
vote at such meeting or any adjournment thereof or to be treated as a
Shareholder of record for purposes of such other action.
Section 5.6 Quorum and Required Vote. Thirty percent of the Shares
------------------------
entitled to vote shall be a quorum for the transaction of business at a
Shareholders' meeting, but any lesser number shall be sufficient for
adjournments. Any adjourned session or sessions may be held, within a
reasonable time after the date set for the original meeting, without the
necessity of further notice. A majority of the Shares voted, at a meeting at
which a quorum is present, shall decide any questions and a plurality shall
16
elect a Trustee, except when a different vote is required or permitted by any
provision of the 1940 Act or other applicable law or by this Declaration of
Trust or the By-Laws. If a Series or a class of Shares is required or permitted
by the 1940 Act or other applicable law or by this Declaration of Trust or the
By-Laws to have exclusive voting rights with respect to certain matters, the
aforesaid quorum and voting requirements shall apply to the action to be taken
on those matters by the Shareholders of such Series or class.
Section 5.7 Action by Written Consent. Subject to the provisions of
-------------------------
the 1940 Act and other applicable law, any action taken by Shareholders may be
taken without a meeting if the Shareholders of a majority of the outstanding
shares entitled to vote on the matter (or such larger portion thereof as shall
be required by the 1940 Act or by any express provision of this Declaration of
Trust or the By-Laws) consent to the action in writing and such written consents
are filed with the records of the meetings of Shareholders. Such consent shall
be treated for all purposes as a vote taken at a meeting of Shareholders.
Section 5.8 Inspection of Records. The records of the Trust shall be
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open to inspection by Shareholders to the same extent as is permitted
stockholders of a Massachusetts business corporation under the Massachusetts
Business Corporation Law.
Section 5.9 Additional Provisions. The By-Laws may include further
---------------------
provisions for Shareholders' votes and meetings and related matters not
inconsistent with the provisions hereof.
ARTICLE VI
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LIMITATION OF LIABILITY; INDEMNIFICATION
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Section 6.1 Trustees, Shareholders, etc. Not Personally Liable;
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Notice. All persons extending credit to, contracting with or having any claim
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against the Trust shall look only to the assets of the Sub-Trust or class
thereof with which such person dealt for payment under such credit, contract or
claim; and neither the Shareholders of any Sub-Trust nor the Trustees nor any of
the Trust's officers, employees or agents, whether past, present or future, nor
any other Sub-Trust shall be personally liable therefor. Every note, bond,
contract, instrument, certificate or undertaking and every other act or thing
whatsoever executed or done by or on behalf of the Trust, any Sub-Trust or the
Trustees or any of them in connection with the Trust shall be conclusively
deemed to have been executed or done only by or for the Trust (or the Sub-Trust)
or the Trustees and not personally. Nothing in this Declaration of Trust shall
protect any Trustee or officer against any liability to the Trust or the
Shareholders to which such Trustee or officer would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of the office of Trustee or of such
officer.
Every note, bond, contract, instrument, certificate or undertaking
made or issued by the Trustees or by any officers or officer shall give notice
that this Declaration of Trust is on file with the Secretary of the Commonwealth
of Massachusetts and shall recite to the effect that the same was executed or
made by or on behalf of the Trust or by them as Trustees or Trustee or as
officers or officer and not individually and that the obligations of such
instrument are not binding upon any of them or the Shareholders individually but
are binding only upon the assets belonging to the Trust, or the particular Sub-
Trust or class in question, as the case may be, but the omission thereof shall
not operate to bind any Trustees or Trustee or officers or officer or
Shareholders or Shareholder individually.
Section 6.2 Trustee's Good Faith Action; Expert Advice; No Bond or
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Surety. The exercise by the Trustees of their powers and discretions hereunder
------
shall be binding upon everyone interested. A Trustee shall be liable for his
own willful misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of the office of Trustee, and for nothing
else, and shall not be liable
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for errors of judgement or mistakes of fact or law. Subject to the foregoing,
(a) the Trustees shall not be responsible or liable in any event for any neglect
or wrongdoing of any officer, agent, employee, consultant, adviser,
administrator, distributor or principal underwriter, custodian, or transfer,
dividend disbursing, Shareholder servicing or accounting agent of the Trust, nor
shall any Trustee be responsible for the act or omission of any other Trustee;
(b) the Trustees may take advice of counsel or other experts with respect to the
meaning and operation of this Declaration of Trust and their duties as Trustees,
and shall be under no liability for any act or omission in accordance with such
advice or for failing to follow such advice; and (c) in discharging their
duties, the Trustees, when acting in good faith, shall be entitled to rely upon
the books of account of the Trust and upon written reports made to the Trustees
by any officer appointed by them, any independent public accountant, and (with
respect to the subject matter of the contract involved) any officer, partner or
responsible employee of a Contracting Party appointed by the Trustees pursuant
to Section 3.3 The Trustees as such shall not be required to give any bond or
surety or any other security for the performance of their duties.
Section 6.3 Indemnification of Shareholders. In case any Shareholder
-------------------------------
(or former Shareholder) of any Sub-Trust shall be charged or held to be
personally liable for any obligation or liability of the Trust solely be reason
of being or having been a Shareholder and not because of such Shareholder's acts
or omissions or for some other reason, the Sub-Trust (upon proper and timely
request by the Shareholder) shall assume the defense against such charge and
satisfy any judgment thereon, and the Shareholder or former Shareholder (or his
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 against all loss and
expense arising from such liability, but only out of the assets of such Sub-
Trust.
Section 6.4 Indemnification of Trustees, Officers, etc. The Trust
------------------------------------------
shall indemnify (from the assets of the Sub-Trust or Sub-Trusts in question)
each of its Trustees and officers (including persons who serve at the Trust's
request as directors, officers, or trustees of another organization in which the
Trust has an interest as a shareholder, creditor or otherwise) (herein referred
to as a "Covered Person") against all liabilities, including but not limited to
amounts paid in satisfaction of judgements, in compromise or as fines and
penalties, and against all expenses, including but not limited to accountants
and counsel fees, reasonably incurred by any Covered Person in connection with
the defense or disposition of any action, suit or other proceeding, whether
civil or criminal, before any court or administrative or legislative body, in
which such Covered Person may be or may have been involved as a party or
otherwise or with which such person may be or may have been threatened, while in
office or thereafter, by reason of being or having been such a Trustee or
officer, director or trustee, except as otherwise provided in Section 6.5.
Expenses, including accountants and counsel fees so incurred by any such Covered
Person (but excluding amounts paid in satisfaction of judgments, in compromise
or as fines or penalties), may be paid from time to time by the Sub-Trust in
question in advance of the final disposition of any such action, suit or
proceeding, upon receipt of an undertaking by or on behalf of the Covered Person
to repay the amounts so paid to the Sub-Trust in question if it is ultimately
determined that indemnification of such expenses is not authorized under this
Article, provided that (i) the Covered Person shall have provided security for
such undertaking, (ii) the Trust shall be insured against losses arising by
reason of any lawful advances, or (iii) a majority of a quorum of the Trustees
who are neither Interested Persons of the Trust (the "disinterested Trustees")
nor parties to the proceeding, or an independent legal counsel in a written
opinion, shall have determined, based on a review of readily available facts (as
opposed to a full trial-type inquiry), that there is reason to believe that the
Covered Person ultimately will be found entitled to indemnification.
Section 6.5 Exceptions to Indemnification. Indemnification shall not
-----------------------------
be provided to a Covered Person under Section 6.4 if it shall have been finally
adjudicated in a decision on the merits by the court or other body before which
the proceeding was brought that such Covered Person (i) did not act in good
faith in the reasonable belief that such Covered Person's action was in the best
interests of the Trust or (ii) is liable to the Trust or its Shareholders by
reason of willful misfeasance, bad faith, gross negligence
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or reckless disregard of the duties involved in the conduct of such Covered
Person's office (either and both of the conduct described in (i) and (ii) being
referred to hereafter as "Disabling Conduct"). As to any matter disposed of
(whether by a compromise payment, pursuant to a consent decree or otherwise)
without a final adjudication in a decision on the merits that such Covered
Person is liable by reason of Disabling Conduct, indemnification shall be
provided if there has been (i) a determination by the court or other body before
which the proceeding was brought that the Covered Person was not liable by
reason of Disabling Conduct, (ii) a dismissal of a court action or any
administrative or other proceeding against a Covered Person for insufficiency of
evidence of Disabling Conduct, or (iii) a reasonable determination, based upon a
review of the facts, that the Covered Person was not liable by reason of
Disabling Conduct either by a vote of a majority of a quorum of disinterested
Trustees who are not parties to the proceeding, or by an independent legal
counsel in a written opinion. Approval by the Trustees or by independent legal
counsel of indemnification as to any matter disposed of by a compromise payment
by the Covered Person shall not prevent the recovery from the Covered Person of
any amount paid to such Covered Person as indemnification for such payment or
for any other expenses if such Covered Person is subsequently adjudicated by a
court of competent jurisdiction to be liable by reason of Disabling Conduct.
Section 6.6 Indemnification Not Exclusive, etc. The right of
----------------------------------
indemnification provided by this Article shall not be exclusive of or affect any
other rights to which any such Covered Person may be entitled. As used in this
Article, "Covered Person" shall include such person's heirs, executors and
administrators. Nothing contained in this Article shall affect any rights to
indemnification to which personnel of the Trust, other than Trustees and
officers, and other persons may be entitled by contract or otherwise under law,
nor the power of the Trust to purchase and maintain liability insurance on
behalf of any such person.
Section 6.7 Liability of Third Persons Dealing with Trustee. No
-----------------------------------------------
person dealing with the Trustees shall be bound to make any inquiry concerning
the validity of any transaction made or to be made by the Trustees or to see to
the application of any payments made or property transferred to the Trust or
upon its order.
ARTICLE VII
-----------
MISCELLANEOUS
-------------
Section 7.1 Duration and Termination of Trust. Unless terminated as
---------------------------------
provided herein, the Trust shall continue without limitation of time and,
without limiting the generality of the foregoing, no change, alteration or
modification with respect to any Sub-Trust shall operate to terminate the Trust.
The Trust may be terminated at any time by a majority of the Trustees then in
office by written notice to the Shareholders or by a Majority Shareholder Vote,
Shares of each Sub-Trust voting separately by Sub-Trust. Any Sub-Trust may be
terminated at any time by a majority of the Trustees then in office by written
notice to the Shareholders of that Sub-Trust or by a Majority Shareholder Vote
of the Shares of that Sub-Trust.
Upon termination of the Trust or any Sub-Trust, after paying or
otherwise providing for all charges, taxes, expenses and liabilities, whether
due or accrued or anticipated as may be determined by the Trustees, the Trust
shall, in accordance with such procedures as the Trustees consider appropriate,
reduce the remaining assets to distributable form in cash, securities or other
property, or any combination thereof, and distribute the proceeds to the
Shareholders of the Sub-Trusts involved, in conformity with the provisions of
subsection (e) of Section 4.2.
Section 7.2 Reorganization. The Trust or one or more Sub-Trust may
--------------
merge or consolidate with any other trust, partnership, association, corporation
or other organization and the Trustees may sell,
19
convey and transfer the assets of the Trust, or the assets belonging to any one
or more Sub-Trusts ("Transferor Sub-Trust"), to another trust, partnership,
association, corporation or other organization, or to the Trust to be held as
assets belonging to another Sub-Trust, in exchange for cash, securities or other
consideration (including, in the case of a transfer to another Sub-Trust of the
Trust, Shares of such other Sub-Trust) with such transfer being made subject to,
or with the assumption by the transferee of, the liabilities belonging to each
Transferor Sub-Trust; provided, however, that no merger, consolidation or sale
of all or substantially all the assets belonging to any particular Sub-Trust
shall be effected unless the terms of such transaction shall have first been
approved by a Majority Shareholder Vote of the Shareholders of that Sub-Trust.
Section 7.3 Amendments. All rights granted to the Shareholders under
----------
this Declaration of Trust are granted subject to the reservation of the right to
amend this Declaration of Trust as herein provided, except that no amendment
shall repeal the limitations on personal liability of any Shareholder or Trustee
or repeal the prohibition of assessment upon the Shareholders without the
express consent of each Shareholder or Trustee involved. Subject to the
foregoing, the provisions of this Declaration of Trust (whether or not related
to the rights of Shareholders) may be amended at any time, so long as such
amendment does not adversely affect the rights of any Shareholder with respect
to which such amendment is or purports to be applicable and so long as such
amendment is not in contravention of applicable law, including the 1940 Act, by
an instrument in writing signed by a majority of the then Trustees (or by an
officer of the Trust pursuant to the vote of a majority of such Trustees). Any
amendment to this Declaration of Trust that adversely affects the rights of
Shareholders may be adopted at any time by an instrument in writing signed by a
majority of the then Trustees (or by an officer of the Trust pursuant to a vote
of a majority of such Trustees) when authorized to do so by a Majority
Shareholder Vote in accordance with subsection (f) of Section 4.2.
An amendment which would affect the Shareholders of one or more Sub-Trusts but
not the Shareholders of all Sub-Trusts shall be authorized by a Majority
Shareholder Vote of the Shareholders of each Sub-Trust affected, and no vote of
Shareholders of a Sub-Trust not affected shall be required. Subject to the
foregoing, any such amendment shall be effective as provided in the instrument
containing the terms of such amendment or, if there is no provision therein with
respect to effectiveness, upon the execution of such instrument and of a
certificate (which may be a part of such instrument) executed by a Trustee or
officer of the Trust to the effect that such amendment has been duly adopted.
Section 7.4 Resident Agent. The Trustees shall have the power to
--------------
appoint on behalf of the Trust a resident agent and maintain a resident agent
for the Trust in the Commonwealth of Massachusetts, and from time to time, to
replace the resident agent so appointed. The initial resident agent shall be
Xxxx X. XxxXxxx III, Esq., 000 Xxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, 00000.
Section 7.5 Filing of Copies; References; Headings. The original or
--------------------------------------
a copy of this instrument and of each amendment hereto, shall be kept at the
office of the Trust where it may be inspected by any Shareholder. A copy of
this instrument and of each amendment hereto shall be filed by the Trust with
the Secretary of The Commonwealth of Massachusetts and with the Boston City
Clerk, as well as any other governmental office where such filing may from time
to time be required, but the failure to make any such filing shall not impair
the effectiveness of this instrument or any such amendment. Anyone dealing with
the Trust may rely on a certificate by an officer of the Trust as to whether or
not any such amendments have been made, as to the identities of the Trustees and
officers, and as to any matters in connection with the Trust hereunder; and,
with the same effect as if it were the original, may rely on a copy certified by
an officer of the Trust to be a copy of this instrument or of any such
amendments. A restated Declaration of Trust, containing the original
Declaration of Trust and all amendments theretofore made, may be executed from
time to time by a majority of the Trustees and shall, upon filing with the
Secretary of The Commonwealth of Massachusetts, be conclusive evidence of all
amendments contained therein and may thereafter be referred to in lieu of the
original Declaration of Trust and the various amendments thereto. In this
instrument and in any such amendment, references to this
20
instrument, and all expressions like "herein", "hereof" and "hereunder" shall be
deemed to refer to this instrument as a whole as the same may be amended or
affected by any such amendments. The masculine gender shall include the female
and neuter genders. 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. This instrument may be executed in
any number of counterparts each of which shall be deemed an original.
Section 7.6 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 Commonwealth of Massachusetts, including the Massachusetts Business
Corporation Law as the same may be amended from time to time, to which reference
is made with the intention that matters not specifically covered herein or as to
which an ambiguity may exist shall be resolved as if the Trust were a business
corporation organized in Massachusetts, but the reference to said Business
Corporation Law is not intended to give the Trust, the Trustees, the
Shareholders or any other person any right, power, authority or responsibility
available only to or in connection with an entity organized in corporate form.
The Trust shall be of the type referred to in Section 1 of Chapter 182 of the
Massachusetts General Laws and of the type commonly called a Massachusetts
business trust, and without limiting the provisions hereof, the Trust may
exercise all powers which are ordinarily exercised by such a trust.
Section 7.7 Reliance by Third Parties. Any certificate executed by
-------------------------
an individual who, according to the records of the Trust, appears to be a
Trustee hereunder, or Secretary or Assistant Secretary of the Trust, certifying
to: (a) the number or identity of Trustees or Shareholders, (b) the due
authorization of the execution of any instrument or writing, (c) the form of any
vote passed at a meeting of Trustees or Shareholders, (d) the fact that the
number of Trustees or Shareholders present at any meeting or executing any
written instruments satisfies the requirement of this Declaration of Trust, (e)
the form of any By-Laws adopted by or the identity of any officers elected by
the Trustees, or (f) the existence of any fact or facts which in any manner
relate to the affairs of the Trust, shall be conclusive evidence as to the
matters so certified in favor of any person dealing with the Trustees and their
successors.
Section 7.8 Provisions in Conflict with Law or Regulations.
----------------------------------------------
The provisions of this Declaration are severable, and if the Trustees
shall determine, with the advice of counsel, that any of such provisions is in
conflict with the 1940 Act, the regulated investment company provisions of the
Internal Revenue Code, the laws of The Commonwealth of Massachusetts or other
applicable laws and regulations, the conflicting provisions shall be deemed
superseded by such law or regulation to the extent necessary to eliminate such
conflict; 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.
If any provision of this Declaration of Trust shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
pertain 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 7.9 Use of the Name "North American." North American Life
---------------------------------
Assurance Company ("North American") has consented to the use by the Trust of
the identifying name "North American", which is a property right of North
American. The Trust will only use the name "North American" or the initials
"NA" as a component of its name and for no other purpose, and will not purport
to grant any third party the right to use the name "North American" or the
initials "NA" for any purpose. North American or any corporate affiliate of
North American may use or grant to others the right to use the name "North
American" or the initials "NA", as all or a portion of a corporate or business
name or for any commercial purpose, including a grant of such right to any other
investment company. At the request of North American, the Trust will take such
action as may be required to provide its consent to the use by North
21
American, or any corporate affiliate of North American, or by any person to whom
North American or an affiliate of North American shall have granted the right to
the use of the name "North American" or the initials "NA". At the request of
North American, the Trust shall cease to use the name "North American" or the
initials "NA" as a component of its name, and shall not use such name or
initials as a part of its name or for any other commercial purpose, and shall
cause its officers and trustees to take any and all actions which North American
may request to effect the foregoing and to reconvey to North American or such
corporate affiliate of North American any and all rights to such name and
initials.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
18th day of February, 1994.
Xxxxxxx X. Xxxxxxxx
-------------------
Xxxxxxx X. Xxxxxxxx
Trustee
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