XXXXX XXXXX LOW DURATION DIVERSIFIED INCOME FUND
-------------------
AGREEMENT AND DECLARATION OF TRUST
Dated April 15, 2004
TABLE OF CONTENTS
ARTICLE I - NAME AND DEFINITIONS............................................ 1
Section 1.1. Name............................................... 1
Section 1.2. Definitions........................................ 1
ARTICLE II - TRUSTEES....................................................... 3
Section 2.1. Management of the Trust............................ 3
Section 2.2 Number of Trustees................................. 3
Section 2.3 Terms of Office of Trustee......................... 3
Section 2.4 Resignation and Appointment of Trustees............ 3
Section 2.5 Vacancies.......................................... 4
Section 2.6 Delegation of Power to Other Trustees.............. 4
Section 2.7 Removal of Trustees................................ 4
Section 2.8. General Powers..................................... 4
Section 2.9. Investments........................................ 5
Section 2.10. Legal Title........................................ 6
Section 2.11. By-Laws............................................ 7
Section 2.12. Distribution and Repurchase of Shares.............. 7
Section 2.13. Delegation......................................... 7
Section 2.14. Collection and Payment............................. 7
Section 2.15. Expenses........................................... 7
Section 2.16. Committees......................................... 7
Section 2.17. Miscellaneous Powers............................... 8
Section 2.18. Litigation......................................... 8
ARTICLE III - CONTRACTS..................................................... 8
Section 3.1. Principal Underwriter.............................. 8
Section 3.2. Investment Adviser................................. 9
Section 3.3. Administrator...................................... 9
Section 3.4. Other Service Providers............................ 9
Section 3.5. Transfer Agents.................................... 9
Section 3.6. Custodian.......................................... 9
Section 3.7. Affiliations....................................... 9
ARTICLE IV - LIMITATIONS OF LIABILITY OF SHAREHOLDERS, TRUSTEES
AND OTHERS..................................................... 10
Section 4.1. No Personal Liability of Shareholders, Trustees,
Officers and Employees............................. 10
Section 4.2. Trustee's Good Faith Action; Advice to Others;
No Bond or Surety.................................. 10
Section 4.3. Indemnification.................................... 10
Section 4.4. No Duty of Investigation........................... 11
Section 4.5. Reliance on Records and Experts.................... 11
i
ARTICLE V - SHARES OF BENEFICIAL INTEREST................................... 11
Section 5.1. Shares of Beneficial Interest...................... 11
Section 5.2. Voting Powers...................................... 11
Section 5.3. Rights of Shareholders............................. 12
Section 5.4. Trust Only......................................... 12
Section 5.5. Issuance of Shares................................. 12
ARTICLE VI - REDEMPTIONS AND REPURCHASES.................................... 13
Section 6.1. Redemptions and Repurchases of Shares.............. 13
Section 6.2. Manner of Payment.................................. 13
Section 6.3. Involuntary Redemption............................. 13
ARTICLE VII - DETERMINATION OF NET ASSET VALUE, NET INCOME AND
DISTRIBUTIONS................................................. 14
Section 7.1. Net Asset Value.................................... 14
Section 7.2. Dividends and Distributions........................ 14
Section 7.3. Power to Modify Foregoing Procedures............... 15
ARTICLE VIII - DURATION; TERMINATION OF TRUST OR A CLASS OR SERIES;
MERGERS; AMENDMENTS.......................................... 15
Section 8.1. Duration........................................... 15
Section 8.2. Merger or Termination of the Trust or a Series
or a Class......................................... 15
Section 8.3. Amendments......................................... 15
Section 8.4. Certain Transactions............................... 16
Section 8.5. Conversion......................................... 18
ARTICLE IX - MISCELLANEOUS.................................................. 18
Section 9.1. Use of the Words "Xxxxx Xxxxx"..................... 18
Section 9.2. Notices............................................ 18
Section 9.3. Filing of Copies, References, Headings and
Counterparts....................................... 18
Section 9.4. Applicable Law..................................... 19
Section 9.5. Provisions in Conflict with Law or Regulations..... 19
ii
AGREEMENT AND DECLARATION OF TRUST, made April 15, 2004 by the Trustees
hereunder and by the holders of beneficial interest to be issued hereunder as
hereinafter provided and
WITNESSETH:
WHEREAS, the Trust has been formed to carry on the business of an
investment company; and
WHEREAS, the Trustees have agreed to manage all property coming into their
hands as trustees of a Massachusetts voluntary association with transferable
shares in accordance with the provisions hereinafter set forth;
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust established hereunder shall be held and managed under
this Agreement and Declaration of Trust for the benefit of the holders, from
time to time, of the shares of beneficial interest to be issued hereunder and
subject to the provisions set forth below.
ARTICLE I
NAME AND DEFINITIONS
--------------------
SECTION 1.1. NAME. The name of the trust created hereby is Xxxxx Xxxxx
Low Duration Diversified Income Fund.
SECTION 1.2. DEFINITIONS. Wherever they are used herein, the following
terms have the following respective meanings:
(a) "Administrator" means the party, other than the Trust, to a contract
described in Section 3.3 hereof.
(b) "By-Laws" means the By-Laws referred to in Section 2.11 hereof, as from
time to time amended.
(c) "Class" means any class of Shares designated by the Trustees as such
following any division of Shares of the Trust into two or more Classes as
provided in Section 5.1 hereof.
(d) The term "Commission" has the meaning given the term in the 1940 Act.
(e) "Custodian" means any Person other than the Trust who has custody of
any Trust Property as required by Section 17(f) of the 1940 Act, but does not
include a system for the central handling of securities described in said
Section 17(f).
(f) "Declaration" means this Declaration of Trust as amended from time to
time.
(g) "His" shall include the feminine and neuter, as well as the masculine,
genders.
(h) The term "Interested Person" has the meaning specified in the 1940 Act
subject, however, to such exceptions and exemptions as may be granted by the
Commission in any rule, regulation or order.
(i) "Investment Adviser" means the party, other than the Trust, to an
agreement described in Section 3.2 hereof.
(j) The "1940 Act" means the Investment Company Act of 1940 and the Rules
and Regulations thereunder, as amended from time to time.
(k) "Outstanding Shares" means those Shares shown from time to time on the
books of the Trust or its Transfer Agent as then issued and outstanding.
(l) "Person" means and includes individuals, corporations, limited
liability companies, partnerships, trusts, associations, firms, joint ventures
and other entities, whether or not legal entities, as well as governments,
instrumentalities, and agencies and political subdivisions thereof, and
quasi-governmental agencies and instrumentalities.
(m) "Principal Underwriter" means a party, other than the Trust, to a
contract described in Section 3.1 hereof.
(n) "Prospectus" means the Prospectus and Statement of Additional
Information, if any, included in the Registration Statement of the Trust under
the Securities Act of 1933 as such Prospectus and Statement of Additional
Information, if any, may be amended or supplemented and filed with the
Commission from time to time.
(o) "Registration Statement" means the Registration Statement of the Trust
under the Securities Act of 1933 as such Registration Statement may be amended
and filed with the Commission from time to time.
(p) "Series" means any series of Shares designated by the Trustees as such
following the division of Shares of any Class into two or more Series as
provided in Section 5.1 hereof.
(q) "Shareholder" means a record owner of Outstanding Shares.
(r) "Shares" means the equal proportionate transferable units of interest
into which the beneficial interest in the Trust shall be divided from time to
time, or, if more than one Class or Series is authorized by the Trustees, the
equal proportionate transferable units into which each Class or Series shall be
divided from time to time.
(s) "Transfer Agent" means any Person other than the Trust who maintains
the Shareholder records of the Trust, such as the list of Shareholders, the
number of Shares credited to each account, and the like.
(t) "Trust" means the Trust named in Section 1.1.
(u) The "Trustees" means the persons who have signed this Declaration, so
long as they shall continue in office in accordance with the terms hereof, and
all other persons who now serve or may from time to time be duly elected,
qualified and serving as Trustees in accordance with the provisions of Article
II hereof and the By-Laws of the Trust, and reference herein to a Trustee or the
Trustees shall refer to such person or persons in his capacity or their
capacities as trustees hereunder.
(v) "Trust Property" means any and all property, real or personal, tangible
or intangible, which is owned or held by or for the account of the Trust or the
Trustees, including any and all assets of or allocated to any Class or Series,
as the context may require.
(w) Except as such term may be otherwise defined by the Trustees in
connection with any meeting or other action of Shareholders or in conjunction
with the establishment of any Class or Series, the term "vote" when used in
connection with an action of Shareholders shall include a vote taken at a
meeting of Shareholders or the consent or consents of Shareholders taken without
such a meeting.
2
ARTICLE II
TRUSTEES
--------
SECTION 2.1. MANAGEMENT OF THE TRUST. The business and affairs of the Trust
shall be managed by the Trustees and they shall have all powers and authority
necessary, appropriate or desirable to perform that function.
SECTION 2.2. NUMBER OF TRUSTEES. The number of Trustees shall be such
number as shall be fixed from time to time by a written instrument signed by a
majority of the Trustees, provided, however, that the number of Trustees shall
in no event be less than two (2) nor more than fifteen (15). No reduction in the
number of Trustees shall have the effect of removing any Trustee from office
prior to the expiration of his term unless the Trustee is specifically removed
pursuant to Section 2.3 or Section 2.7 of this Article II at the time of
decrease.
SECTION 2.3. TERM OF OFFICE OF TRUSTEES. The Board of Trustees shall be
divided into three classes. Within the limits above specified, the number of the
Trustees in each class and the class which each Trustee is assigned shall be
determined by resolution of the Board of Trustees. The term of office of the
first class shall expire on the date of the first annual meeting of Shareholders
or special meeting in lieu thereof following the effective date of the
Registration Statement. The term of office of the second class shall expire on
the date of the second annual meeting of Shareholders or special meeting in lieu
thereof following the effective date of the Registration Statement. The term of
office of the third class shall expire on the date of the third annual meeting
of Shareholders or special meeting in lieu thereof following the effective date
of the Registration Statement. Upon expiration of the term of office of each
class as set forth above, the number of Trustees in such class, as determined by
the Board of Trustees, shall be elected for a term expiring on the date of the
third annual meeting of Shareholders or special meeting in lieu thereof
following such expiration to succeed the Trustees whose terms of office expire.
The Trustees shall be elected at an annual meeting of the Shareholders or
special meeting in lieu thereof called for that purpose, except as provided in
Section 2.3 of this Article and each Trustee elected shall hold office until his
successor shall have been elected and shall have qualified; except (a) that any
Trustee may resign his trust (without need for prior or subsequent accounting)
by an instrument in writing signed by him and delivered to the other Trustees,
which shall take effect upon such delivery or upon such later date as is
specified therein; (b) that any Trustee may be removed (provided the aggregate
number of Trustees after such removal shall not be less than the number required
by Section 2.2 hereof) for cause, at any time by written instrument, signed by
the remaining Trustees, specifying the date when such removal shall become
effective; and (c) that any Trustee who requests in writing to be retired or who
has become incapacitated by illness or injury may be retired by written
instrument signed by a majority of the other Trustees, and he shall execute and
deliver such documents as the remaining Trustees shall require for the purpose
of conveying to the Fund or the remaining Trustees any Fund property held in the
name of the resigning or removed Trustee. Upon the incapacity or death of any
Trustee, his legal representative shall execute and deliver on his behalf such
document as the remaining Trustees shall require as provided in the preceding
sentence.
SECTION 2.4. RESIGNATION AND APPOINTMENT OF TRUSTEES. In case of the
declination, death, resignation, retirement, removal or inability of any of the
Trustees, or in case a vacancy shall, by reason of any increase in number, or
for any other reason, exist, the remaining Trustees or, prior to the public
offering of Shares of the Fund, if only one Trustee shall then remain in office,
the remaining Trustee, shall fill such vacancy by appointing such other person
as they, or anyone of them, in their discretion, shall see fit. Such appointment
shall be evidenced by a written instrument signed by a majority of the remaining
Trustees or by the remaining Trustee, as the case may be. Any such appointment
shall not become effective, however, until the person named in the written
3
instrument or appointment shall have accepted in writing such appointment and
agreed in writing to be bound by the terms of the Declaration. Within twelve
months of such appointment, the Trustees shall cause notice of such appointment
to be mailed to each Shareholder at his address as recorded on the books of the
Fund. An appointment of a Trustee may be made by the Trustees then in office and
notice thereof mailed to Shareholders as aforesaid in anticipation of a vacancy
to occur by reason of retirement, resignation or increase in number of Trustees
effective at a later date, provided that said appointment shall become effective
only at or after the effective date of said retirement, resignation or increase
in number of Trustees. The power of appointment is subject to the provisions of
Section 16(a) of the 1940 Act.
SECTION 2.5. VACANCIES. The death, declination, resignation, retirement,
removal or incapacity of the Trustees, or any one of them, shall not operate to
annul the Fund or to remove any existing agency created pursuant to the terms of
this Declaration. Whenever a vacancy in the number of Trustees shall occur,
until such vacancy is filled as provided in Section 2.3, the Trustees in office,
regardless of their number, shall have all the duties imposed upon the Trustees
by the Declaration and only such Trustees shall be counted for the purposes of
establishing the existence of a quorum or performing such duties or exercising
such powers of the Trustees as described in this Declaration. A written
instrument certifying the existence of such vacancy signed by a majority of the
Trustees shall be conclusive evidence of the existence of such vacancy.
SECTION 2.6. DELEGATION OF POWER TO OTHER TRUSTEES. Subject to the
provisions of the 1940 Act, any Trustee may, by power of attorney, delegate his
power for a period not exceeding six (6) months at any one time to any other
Trustee or Trustees; provided that in no case shall less than two (2) Trustees
personally exercise the powers granted to the Trustees under the Declaration
except as herein otherwise expressly provided.
SECTION 2.7. REMOVAL OF TRUSTEES BY THE SHAREHOLDERS. The Fund shall comply
with the provisions of Section 16(c) of the 1940 Act as though applicable to the
Fund, and with interpretations hereof by the Commission staff, insofar as such
provisions and interpretations provide for the removal of trustees of common-law
trusts and the calling of Shareholder meetings for such purpose; provided,
however, that the Fund may at any time or from time to time apply to the
Commission for one or more exemptions from all or part of said Section 16(c) or
a staff interpretation thereof and, if exemptive order(s) or interpretation(s)
are issued or provided by the Commission or its staff, such order(s) or
interpretation(s) shall be deemed part of Section 16(c) for the purpose of
applying this Section 2.7.
SECTION 2.8. GENERAL POWERS. The Trustees in all instances shall act as
principals for and on behalf of the Trust and their acts shall bind the Trust.
The business and affairs of the Trust shall be managed by the Trustees and they
shall have full power and authority to do any and all acts and to make and
execute any and all contracts and instruments that they may consider necessary,
appropriate or desirable in connection with the management of the Trust. The
Trustees shall not be bound or limited in any way by present or future laws,
practices or customs in regard to trust investments or to other investments
which may be made by fiduciaries, but shall have full authority and power to
make any and all investments which they, in their uncontrolled discretion, shall
deem proper to promote, implement or accomplish the various objectives and
interests of the Trust and of its Classes and Series. The Trustees shall have
full power and authority to adopt such accounting and tax accounting practices
as they consider appropriate for the Trust and for any Class or Series. The
Trustees shall have exclusive and absolute control over the Trust Property and
over the business of the Trust to the same extent as if the Trustees were the
sole owners of the Trust Property and business in their own right, and with such
full powers of delegation as the Trustees may exercise from time to time. The
Trustees shall have power to conduct the business of the Trust and carry on its
operations in any and all of its branches and maintain offices both within and
without The Commonwealth of Massachusetts, in any and all states of the United
States of America, in the District of Columbia, and in any and all
commonwealths, territories, dependencies, colonies, possessions, agencies, and
instrumentalities of the United States of America and of foreign governments,
and to do all such other things as they deem necessary, appropriate or desirable
in order to promote or implement the interests of the Trust or of any Class or
Series although such things are not herein specifically mentioned. Any
determination as to what is in the interests of the Trust or of any Class or
Series made by the Trustees in good faith shall be conclusive and binding upon
4
all Shareholders. In construing the provisions of this Declaration, the
presumption shall be in favor of a grant of plenary power and authority to the
Trustees.
The enumeration of any specific power in this Declaration shall not be
construed as limiting the aforesaid general and plenary powers.
SECTION 2.9. INVESTMENTS. The Trustees shall have full power and authority:
(a) To operate as and carry on the business of an investment company, and
exercise all the powers necessary and appropriate to the conduct of such
operations.
(b) To acquire or buy, and invest Trust Property in, own, hold for
investment or otherwise, and to sell or otherwise dispose of, all types and
kinds of securities and investments of any kind including, but not limited to,
stocks, profit-sharing interests or participations and all other contracts for
or evidences of equity interests, bonds, debentures, warrants and rights to
purchase securities, and interests in loans, certificates of beneficial
interest, bills, notes and all other contracts for or evidences of indebtedness,
money market instruments including bank certificates of deposit, finance paper,
commercial paper, bankers' acceptances and other obligations, and all other
negotiable and non-negotiable securities and instruments, however named or
described, issued by corporations, trusts, associations or any other Persons,
domestic or foreign, or issued or guaranteed by the United States of America or
any agency or instrumentality thereof, by the government of any foreign country,
by any State, territory or possession of the United States, by any political
subdivision or agency or instrumentality of any state or foreign country, or by
any other government or other governmental or quasi-governmental agency or
instrumentality, domestic or foreign; to acquire and dispose of interests in
domestic or foreign loans made by banks and other financial institutions; to
deposit any assets of the Trust in any bank, trust company or banking
institution or retain any such assets in domestic or foreign cash or currency;
to purchase and sell gold and silver bullion, precious or strategic metals, and
coins and currency of all countries; to engage in "when issued" and delayed
delivery transactions; to enter into repurchase agreements, reverse repurchase
agreements and firm commitment agreements; to employ all types and kinds of
hedging techniques and investment management strategies; and to change the
investments of the Trust and of each Class or Series.
(c) To acquire (by purchase, subscription or otherwise), to hold, to trade
in and deal in, to acquire any rights or options to purchase or sell, to sell or
otherwise dispose of, to lend and to pledge any Trust Property or any of the
foregoing securities, instruments or investments; to purchase and sell options
on securities, currency, precious metals and other commodities, indices, futures
contracts and other financial instruments and assets and enter into closing and
other transactions in connection therewith; to enter into all types of
commodities contracts, including without limitation the purchase and sale of
futures contracts on securities, currency, precious metals and other
commodities, indices and other financial instruments and assets; to enter into
forward foreign currency exchange contracts and other foreign exchange and
currency transactions of all types and kinds; to enter into interest rate,
currency and other swap transactions; and to engage in all types and kinds of
hedging and risk management transactions.
(d) To exercise all rights, powers and privileges of ownership or interest
in all securities and other assets included in the Trust Property, including
without limitation the right to vote thereon and otherwise act with respect
thereto; and to do all acts and things for the preservation, protection,
improvement and enhancement in value of all such securities and assets.
5
(e) To acquire (by purchase, lease or otherwise) and to hold, use,
maintain, lease, develop and dispose of (by sale or otherwise) any type or kind
of property, real or personal, including domestic or foreign currency, and any
right or interest therein.
(f) To borrow money and in this connection issue notes, commercial paper or
other evidence of indebtedness; to secure borrowings by mortgaging, pledging or
otherwise subjecting as security all or any part of the Trust Property; to
endorse, guarantee, or undertake the performance of any obligation or engagement
of any other Person; to lend all or any part of the Trust Property to other
Persons; and to issue general unsecured or other obligations of the Trust, and
enter into indentures or agreements relating thereto.
(g) To aid, support or assist by further investment or other action any
Person, any obligation of or interest which is included in the Trust Property or
in the affairs of which the Trust or any Class or Series has any direct or
indirect interest; to do all acts and things designed to protect, preserve,
improve or enhance the value of such obligation or interest; and to guarantee or
become surety on any or all of the contracts, securities and other obligations
of any such Person.
(h) To join other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to deposit any
security with, or transfer any security to, any such committee, depositary or
trustee, and to delegate to them such power and authority with relation to any
security (whether or not so deposited or transferred) as the Trustees shall deem
proper, and to agree to pay, and to pay, such portion of the expenses and
compensation of such committee, depositary or trustee as the Trustees shall deem
proper.
(i) To carry on any other business in connection with or incidental to any
of the foregoing powers referred to in this Declaration, to do everything
necessary, appropriate or desirable for the accomplishment of any purpose or the
attainment of any object or the furtherance of any power referred to in this
Declaration, either alone or in association with others, and to do every other
act or thing incidental or appurtenant to or arising out of or connected with
such business or purposes, objects or powers.
(j) To the extent necessary or appropriate to give effect to the
preferences, special or relative rights and privileges of any Class or Series,
to allocate assets, liabilities, income and expenses of the Trust to particular
Classes or Series or to apportion the same among two or more Classes or Series.
The foregoing clauses shall be construed both as objects and powers, and
shall not be held to limit or restrict in any manner the general and plenary
powers of the Trustees.
Notwithstanding any other provision herein, the Trustees shall have full
power in their discretion, without any requirement of approval by Shareholders,
to invest part or all of the Trust Property (or part or all of the assets of any
Class or Series), or to dispose of part or all of the Trust Property (or part or
all of the assets of any Class or Series) and invest the proceeds of such
disposition, in securities issued by one or more other investment companies
registered under the 1940 Act. Any such other investment company may (but need
not) be a trust (formed under the laws of the State of New York or of any other
state) which is classified as a partnership for federal income tax purposes.
SECTION 2.10. LEGAL TITLE. Legal title to all the Trust Property shall be
vested in the Trustees who from time to time shall be in office. The Trustees
may hold any security or other Trust Property in a form not indicating any
trust, whether in bearer, unregistered or other negotiable form, and may cause
legal title to any security or other Trust Property to be held by or in the name
of one or more of the Trustees, or in the name of the Trust or any Class or
Series, or in the name of a custodian, subcustodian, agent, securities
6
depository, clearing agency, system for the central handling of securities or
other book-entry system, or in the name of a nominee or nominees of the Trust or
a Class or Series, or in the name of a nominee or nominees of a custodian,
subcustodian, agent, securities depository, clearing agent, system for the
central handling of securities or other book-entry system, or in the name of any
other Person as nominee. The right, title and interest of the Trustees in the
Trust Property shall vest automatically in each Person who may hereafter become
a Trustee. Upon the termination of the term of office, resignation, removal or
death of a Trustee he shall automatically cease to have any right, title or
interest in any of the Trust Property, and the right, title and interest of such
Trustee in the Trust Property shall vest automatically in the remaining
Trustees.
SECTION 2.11. BY- LAWS. The Trustees shall have full power and authority to
adopt By-Laws providing for the conduct of the business of the Trust and
containing such other provisions as they deem necessary, appropriate or
desirable, and, subject to the voting powers of one or more Classes or Series,
to amend and repeal such By-Laws. Unless the By-Laws specifically require that
Shareholders authorize or approve the amendment or repeal of a particular
provision of the By-Laws, any provision of the By-Laws may be amended or
repealed by the Trustees without Shareholder authorization or approval.
SECTION 2.12. DISTRIBUTION AND REPURCHASE OF SHARES. The Trustees shall
have full power and authority to issue, sell, repurchase, redeem, retire,
cancel, acquire, hold, resell, reissue, dispose of, transfer, and otherwise deal
in Shares. Shares may be sold for cash or property or other consideration
whenever and in such amounts and manner as the Trustees deem desirable. The
Trustees shall have full power to provide for the distribution of Shares either
through one or more principal underwriters or by the Trust itself, or both.
SECTION 2.13. DELEGATION. The Trustees shall have full power and authority
to delegate from time to time to such of their number or to officers, employees
or agents of the Trust or to other Persons the doing of such things and
execution of such agreements or other instruments either in the name of the
Trust or any Class or Series of the Trust or the names of the Trustees or
otherwise as the Trustees may deem desirable or expedient.
SECTION 2.14. COLLECTION AND PAYMENT. The Trustees shall have full power
and authority to collect all property due to the Trust; to pay all claims,
including taxes, against the Trust or Trust Property; to prosecute, defend,
compromise, settle or abandon any claims relating to the Trust or Trust
Property; to foreclose any security interest securing any obligations, by virtue
of which any property is owed to the Trust; and to enter into releases,
agreements and other instruments.
SECTION 2.15. EXPENSES. The Trustees shall have full power and authority to
incur on behalf of the Trust or any Class or Series and pay any costs or
expenses which the Trustees deem necessary, appropriate, desirable or incidental
to carry out, implement or enhance the business or operations of the Trust or
any Class or Series thereof, and to pay compensation from the funds of the Trust
to themselves as Trustees. The Trustees shall determine the compensation of all
officers, employees and Trustees of the Trust. The Trustees shall have full
power and authority to cause the Trust to charge all or any part of any cost,
expense or expenditure (including without limitation any expense of selling or
distributing Shares) or tax against the principal or capital of the Trust or any
Class or Series, and to credit all or any part of the profit, income or receipt
to the principal or capital of the Trust or any Class or Series.
SECTION 2.16. COMMITTEES. The Trustees may appoint from their own number,
and terminate, any one or more committees consisting of two or more Trustees,
including an executive committee which may, when the Trustees are not in
session, exercise some or all of the power and authority of the Trustees as the
Trustees may determine.
7
SECTION 2.17. MISCELLANEOUS POWERS. The Trustees shall have full power and
authority to: (a) distribute to Shareholders all or any part of the earnings or
profits, surplus (including paid-in surplus), capital (including paid-in
capital) or assets of the Trust or of any Class or Series, the amount of such
distributions and the manner of payment thereof to be solely at the discretion
of the Trustees; (b) employ, engage or contract with such Persons as the
Trustees may deem desirable for the transaction of the business or operations of
the Trust or any Class or Series thereof; (c) enter into or cause the Trust or
any Class or Series thereof to enter into joint ventures, partnerships (whether
as general partner, limited partner or otherwise) and any other combinations or
associations; (d) purchase and pay for entirely out of Trust property 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 insurance policies insuring the Shareholders, Trustees,
officers, employees, agents, investment advisers or managers, principal
underwriters, or independent contractors of the Trust individually against all
claims and liabilities of every nature arising by reason of holding, being or
having held any such office or position, or by reason of any action alleged to
have been taken or omitted by any such person as Shareholder, Trustee, officer,
employee, agent, investment adviser or manager, principal underwriter, or
independent contractor, including any action taken or omitted that may be
determined to constitute negligence, whether or not the Trust would have the
power to indemnify such person against such liability; (e) establish pension,
profit-sharing, share purchase, and other retirement, incentive and benefit
plans for any Trustees, officers, employees and agents of the Trust; (f)
indemnify or reimburse any Person with whom the Trust or any Class or Series
thereof has dealings, including without limitation the Investment Adviser,
Administrator, Principal Underwriter, Transfer Agent, financial service firms
and other agents, to such extent as the Trustees shall determine; (g) guarantee
the indebtedness or contractual obligations of other Persons; (h) determine and
change the fiscal year of the Trust and the methods by which its books, accounts
and records shall be kept; and (i) adopt a seal for the Trust, but the absence
of such seal shall not impair the validity of any instrument executed on behalf
of the Trust.
SECTION 2.18 LITIGATION. The Trustees shall have full power and authority,
in the name and on behalf of the Trust, to engage in and to prosecute, defend,
compromise, settle, abandon, or adjust by arbitration or otherwise, any actions,
suits, proceedings, disputes, claims and demands relating to the Trust, and out
of the assets of the Trust or any Class or Series thereof to pay or to satisfy
any liabilities, losses, debts, claims or expenses (including without limitation
attorneys' fees) incurred in connection therewith, including those of
litigation, and such power shall include without limitation the power of the
Trustees or any committee thereof, in the exercise of their or its good faith
business judgment, to dismiss or terminate any action, suit, proceeding,
dispute, claim or demand, derivative or otherwise, brought by any Person,
including a Shareholder in his own name or in the name of the Trust or any Class
or Series thereof, whether or not the Trust or any Class or Series thereof or
any of the Trustees may be named individually therein or the subject matter
arises by reason of business for or on behalf of the Trust or any Class or
Series thereof.
ARTICLE III
CONTRACTS
---------
SECTION 3.1. PRINCIPAL UNDERWRITER. The Trustees may in their discretion
from time to time authorize the Trust to enter into one or more contracts
providing for the sale of the Shares. Pursuant to any such contract the Trust
may either agree to sell the Shares to the other party to the contract or
appoint such other party its sales agent for such Shares. In either case, any
such contract shall be on such terms and conditions as the Trustees may in their
discretion determine; and any such contract may also provide for the sale of
Shares by such other party as principal or as agent of the Trust.
8
SECTION 3.2. INVESTMENT ADVISER. The Trustees may, subject to any approvals
by Shareholders required by applicable law, in their discretion from time to
time authorize the Trust to enter into one or more investment advisory
agreements whereby the other party or parties to any such agreements shall
undertake to furnish the Trust investment advisory and research facilities and
services and such other facilities and services, if any, as the Trustees shall
consider desirable and all upon such terms and conditions as the Trustees may in
their discretion determine. Notwithstanding any provisions of this Declaration,
the Trustees may authorize the Investment Adviser, in its discretion and without
any prior consultation with the Trust, to buy, sell, lend and otherwise trade
and deal in any and all securities, commodity contracts and other investments
and assets of the Trust and to engage in and employ all types of transactions
and strategies in connection therewith. Any such action taken pursuant to such
agreement shall be deemed to have been authorized by all of the Trustees.
The Trustees may also authorize the Trust to employ, or authorize the
Investment Adviser to employ, one or more sub-investment advisers from time to
time to perform such of the acts and services of the Investment Adviser and upon
such terms and conditions as may be agreed upon between the Investment Adviser
and such sub-investment adviser and approved by the Trustees.
SECTION 3.3. ADMINISTRATOR. The Trustees may in their discretion from time
to time authorize the Trust to enter into one or more administration agreements,
whereby the other party to such agreement shall undertake to furnish to the
Trust or a Series or a Class thereof such administrative facilities and services
and such other facilities and services, if any, as the Trustees consider
desirable and all upon such terms and conditions as the Trustees may in their
discretion determine.
The Trustees may also authorize the Trust to employ or authorize the
Administrator to employ one or more sub-administrators from time to time to
perform such of the acts and services of the Administrator and upon such terms
and conditions as may be agreed upon between the Administrator and such
sub-administrator and approved by the Trustees.
SECTION 3.4. OTHER SERVICE PROVIDERS. The Trustees may in their discretion
from time to time authorize the Trust to enter into one or more agreements
whereby the other party or parties to any such agreements will undertake to
provide to the Trust or any Class or Series or Shareholders or beneficial owners
of Shares such services as the Trustees consider desirable and all upon such
terms and conditions as the Trustees in their discretion may determine.
SECTION 3.5. TRANSFER AGENTS. The Trustees may in their discretion from
time to time appoint one or more transfer agents for the Trust or any Class or
Series thereof. Any contract with a transfer agent shall be on such terms and
conditions as the Trustees may in their discretion determine.
SECTION 3.6. CUSTODIAN. The Trustees may appoint a bank or trust company
having an aggregate capital, surplus and undivided profits (as shown in its last
published report) of at least $2,000,000 as a custodian of the Trust or any
Class or Series with authority as its agent to hold cash and securities owned by
the Trust or the Class or Series and to release and deliver the same and
otherwise to perform such duties as the Trustees may specify, all upon such
terms and conditions as may be agreed upon between the Trust and the Custodian.
SECTION 3.7. AFFILIATIONS. The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust is a
shareholder, creditor, director, officer, partner, trustee or employee of or has
any interest in any Person or any parent or affiliate of any such Person, with
which a contract or agreement of the character described in this Article III has
been or will be made, or that any such Person, or any parent or affiliate
thereof, is a Shareholder of or has an interest in the Trust, or that
9
(ii) any such Person also has similar contracts, agreements or plans with
other investment companies (including, without limitation, the investment
companies referred to in the last paragraph of Section 2.9) or Persons, or has
other business activities or interests, shall not affect in any way the validity
of any such contract, agreement or plan or disqualify any Shareholder, Trustee
or officer of the Trust from authorizing, voting upon or executing the same or
create any liability or accountability to the Trust or its Shareholders.
ARTICLE IV
LIMITATIONS OF LIABILITY OF SHAREHOLDERS, TRUSTEES AND OTHERS
-------------------------------------------------------------
SECTION 4.1. NO PERSONAL LIABILITY OF SHAREHOLDERS, TRUSTEES, OFFICERS AND
EMPLOYEES. No Shareholder shall be subject to any personal liability whatsoever
to any Person in connection with Trust Property or the acts, obligations or
affairs of the Trust or any Class or Series thereof. All Persons dealing or
contracting with the Trustees as such or with the Trust or any Class or Series
thereof or having any claim against the Trust or any Class or Series thereof
shall have recourse only to the Trust or such Class or Series for the payment of
their claims or for the payment or satisfaction of claims, obligations or
liabilities arising out of such dealings or contracts. No Trustee, officer or
employee of the Trust, whether past, present or future, shall be subject to any
personal liability whatsoever to any such Person, and all such Persons shall
look solely to the Trust Property, or to the assets of one or more specific
Class or Series of the Trust if the claim arises from the act, omission or other
conduct of such Trustee, officer or employee with respect to only such Class or
Series, for satisfaction of claims of any nature arising in connection with the
affairs of the Trust or such Class or Series. If any Shareholder, Trustee,
officer or employee, as such, of the Trust is made a party to any suit or
proceeding to enforce any such liability of the Trust or any Class or Series
thereof, he shall not, on account thereof, be held to any personal liability.
SECTION 4.2. TRUSTEE'S GOOD FAITH ACTION; ADVICE TO OTHERS; NO BOND OR
SURETY. The exercise by the Trustees of their powers and discretions hereunder
shall be binding upon all Interested Parties. A Trustee shall not be liable for
errors of judgment or mistakes of fact or law. The Trustees shall not be
responsible or liable in any event for any neglect or wrongdoing of them or of
any officer, agent, employee, consultant, investment adviser or other 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.
The Trustees may take advice of counsel or other experts with respect to the
meaning and operation of this Declaration 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. In discharging their duties, the
Trustees, when acting in good faith, shall be entitled to rely upon the records,
books and accounts of the Trust and upon reports made to the Trustees by any
officer, employee, agent, consultant, accountant, attorney, investment adviser
or other adviser, principal underwriter, expert, professional firm or
independent contractor. The Trustees as such shall not be required to give any
bond or surety or any other security for the performance of their duties. No
provision of this Declaration shall protect any Trustee or officer of the Trust
against any liability to the Trust or its Shareholders to which he would
otherwise be subject by reason of his own willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office.
SECTION 4.3. INDEMNIFICATION. The Trustees may provide, whether in the
By-Laws or by contract, vote or other action, for the indemnification by the
Trust or by any Class or Series thereof of the Shareholders, Trustees, officers
and employees of the Trust and of such other Persons as the Trustees in the
exercise of their discretion may deem appropriate or desirable. Any such
indemnification may be mandatory or permissive, and may be insured against by
policies maintained by the Trust.
10
SECTION 4.4. NO DUTY OF INVESTIGATION. No purchaser, lender or other Person
dealing with the Trustees or any officer, employee or agent of the Trust or a
Class or Series thereof shall be bound to make any inquiry concerning the
validity of any transaction purporting to be made by the Trustees or by said
officer, employee or agent or be liable for the application of money or property
paid, loaned, or delivered to or on the order of the Trustees or of said
officer, employee or agent. Every obligation, contract, instrument, certificate,
Share, other security or undertaking of the Trust or a Class or Series, and
every other act or thing whatsoever executed in connection with the Trust shall
be conclusively presumed to have been executed or done by the executors thereof
only in their capacity as Trustees under this Declaration or in their capacity
as officers, employees or agents of the Trust. Every written obligation,
contract, instrument, certificate, Share, other security or undertaking of the
Trust or a Class or Series made or issued by the Trustees may recite that the
same is executed or made by them not individually, but as Trustees under the
Declaration, and that the obligations of the Trust or a Class or Series thereof
under any such instrument are not binding upon any of the Trustees or
Shareholders individually, but bind only the Trust Property or the Trust
Property of the applicable Class or Series, and may contain any further recital
which they may deem appropriate, but the omission of any such recital shall not
operate to bind the Trustees or Shareholders individually.
SECTION 4.5. RELIANCE ON RECORDS AND EXPERTS. Each Trustee, officer or
employee of the Trust shall, in the performance of his duties, be fully and
completely justified and protected with regard to any act or any failure to act
resulting from reliance in good faith upon the records, books and accounts of
the Trust or a Class or Series thereof, upon an opinion or other advice of legal
counsel, or upon reports made or advice given to the Trust or a Class or Series
thereof by any Trustee or any of the Trust's officers or employees or by the
Investment Adviser, the Administrator, the Custodian, a Principal Underwriter,
Transfer Agent, accountants, appraisers or other experts, advisers, consultants
or professionals selected with reasonable care by the Trustees or officers of
the Trust, regardless of whether the person rendering such report or advice may
also be a Trustee, officer or employee of the Trust.
ARTICLE V
SHARES OF BENEFICIAL INTEREST
-----------------------------
SECTION 5.1. SHARES OF BENEFICIAL INTEREST. The interest of the
beneficiaries of the Trust initially shall be divided into common shares of
beneficial interest of $.01 par value. The number of common shares authorized
hereunder is unlimited. All shares issued, including, without limitation, those
issued in connection with a dividend or distribution or a share split, shall be
fully paid and nonassessable. The Trustees may, without Shareholder approval,
authorize one or more Classes of Shares (which Classes may without Shareholder
approval be divided by the Trustees into two or more Series), Shares of each
such Class or Series having such preferences, voting powers and special or
relative rights or privileges (including conversion rights, if any) as the
Trustees may determine and as shall be set forth in a resolution adopted in
accordance with the By-Laws. The number of Shares of each Class or Series
authorized shall be unlimited except as the By-Laws may otherwise provide. The
Trustees may from time to time divide or combine the Shares of any Class or
Series into a greater or lesser number without thereby changing the
proportionate beneficial interest in the Class or Series.
The ownership of Shares shall be recorded on the books of the Trust or a
transfer or similar agent. No certificates certifying the ownership of Shares
shall 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 Share certificates, 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 as to who are the Shareholders of each
Class or Series and as to the number of Shares of each Class or Series held from
time to time by each Shareholder. The Trustees may at any time discontinue the
issuance of Share certificates and may, by written notice to each Shareholder,
require the surrender of Share certificates to the Trust for cancellation. Such
surrender and cancellation shall not affect the ownership of Shares in the
Trust.
11
SECTION 5.2. VOTING POWERS. Subject to the voting powers of one or more
Classes or Series, the Shareholders shall have power to vote only (i) with
respect to the election of Trustees, (ii) for the removal of Trustees as
provided for herein, (iii) with respect to any Investment Adviser as required by
applicable law, (iv) with respect to any termination or amendment of this Trust,
or with respect to certain transactions, to the extent and as provided in
Article VIII, (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 the Shareholders, and (vi) with respect to such
additional matters relating to the Trust as may be required by law, this
Declaration, the By-Laws or any registration of the Trust with the Securities
and Exchange Commission (or any successor agency) or any state, or as the
Trustees may consider necessary or desirable. Each whole Share shall be entitled
to one vote as to any matter on which it is entitled to vote and each fractional
Share shall be entitled to a proportionate fractional vote. Notwithstanding any
other provision of this Declaration, on any matter submitted to a vote of
Shareholders, all Shares of the Trust then entitled to vote shall, except as
otherwise provided in the By-Laws or required by applicable law, be voted in the
aggregate as a single Class without regard to Classes or Series. There shall be
no cumulative voting in the election of Trustees.
SECTION 5.3. RIGHTS OF SHAREHOLDERS. The ownership of the Trust Property of
every description and the right to conduct any business of the Trust are vested
exclusively in the Trustees, and the Shareholders shall have no interest therein
other than the beneficial interest conferred by their Shares, and they shall
have no right to call for any partition or division of any property, profits,
rights or interests of the Trust or of any Class or Series nor can they be
called upon to share or assume any losses of the Trust or of any Class or Series
or suffer an assessment of any kind by virtue of their ownership of Shares. The
Shares shall be personal property giving only the rights specifically set forth
in this Declaration. The Shares shall not entitle the holder to preference,
preemptive, appraisal, conversion or exchange rights, except as the Trustees may
specifically determine with respect to any Class or Series.
Every Shareholder by virtue of having become a Shareholder shall be held to
have expressly assented and agreed to the terms of this Declaration and the
Bylaws and to have become a party hereto and thereto. The death of a Shareholder
during the continuance of the Trust shall not operate to terminate the same 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.
SECTION 5.4. 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, limited liability company, bailment or any form of legal
relationship other than a Massachusetts business trust. Nothing in this
Declaration shall be construed to make the Shareholders, either by themselves or
with the Trustees, partners or members of a joint stock association.
SECTION 5.5. ISSUANCE OF SHARES. The Trustees in their discretion may, from
time to time and without any authorization or vote of the Shareholders, issue
Shares of any Class or Series, in addition to the then issued and Outstanding
Shares, to such party or parties and for such amount and type of consideration,
including cash or property, at such time or times and on such terms as the
Trustees may deem appropriate or desirable, and may in such manner acquire other
assets (including the acquisition of assets subject to, and in connection with
the assumption of, liabilities) and businesses. In connection with any issuance
of Shares, the Trustees may issue fractional Shares and reissue and resell full
and fractional Shares held in the treasury. The Trustees may authorize the
issuance of certificates of beneficial interest to evidence the ownership of
12
Shares. Shares held in the treasury shall not be voted nor shall such Shares be
entitled to any dividends or other distributions declared with respect thereto.
The Trustees in their discretion may also, from time to time and without any
authorization or vote of the Shareholders, issue to the extent consistent with
applicable law securities of the Trust convertible into Shares of the Trust and
warrants to purchase securities of the Trust, in each case pursuant to such
terms and under such conditions as the Trustees may specify in their discretion.
Shares of any Class or Series, in addition to the then issued and outstanding
Shares, and such warrants or convertible securities, may be issued to such party
or parties and for such amount and type of consideration, including cash or
property, at such time or times and on such terms as the Trustees may deem
appropriate or desirable, and may in such manner acquire other assets (including
the acquisition of assets subject to, and in connection with the assumption of,
liabilities) and businesses. The officers of the Trust are severally authorized
to take all such actions as may be necessary or desirable to carry out this
Section 5.5.
ARTICLE VI
REDEMPTIONS AND REPURCHASES
---------------------------
SECTION 6.1. REDEMPTIONS AND REPURCHASES OF SHARES. From time to time the
Trust may redeem or repurchase its Shares, all upon such terms and conditions as
may be determined by the Trustees and subject to any applicable provisions of
the 1940 Act. The Trust may require Shareholders to pay a withdrawal charge, a
sales charge, or any other form of charge to the Trust, to the underwriter or to
any other person designated by the Trustees upon redemption or repurchase of
Trust Shares in such amount as shall be determined from time to time by the
Trustees. The Trust may also charge a redemption or repurchase fee in such
amount as may be determined from time to time by the Trustees.
SECTION 6.2 MANNER OF PAYMENT. Payment of Shares redeemed or repurchased
may at the option of the Trustees or such officer or officers as they may duly
authorize for the purpose, in their complete discretion, be made in cash, or in
kind, or partially in cash and partially in kind. In case of payment in kind the
Trustees, or their delegate, shall have absolute discretion as to what security
or securities shall be distributed in kind and the amount of the same, and the
securities shall be valued for purposes of distribution at the figure at which
they were appraised in computing the net asset value of the Shares, provided
that any Shareholder who cannot legally acquire securities so distributed in
kind by reason of the prohibitions of the 1940 Act shall receive cash.
SECTION 6.3. INVOLUNTARY REDEMPTION. If the Trustees shall, at any time and
in good faith, be of the opinion that direct or indirect ownership of Shares of
any Class or Series or other securities of the Trust has or may become
concentrated in any person to an extent which would disqualify the Trust as a
regulated investment company under the Internal Revenue Code, then the Trustees
shall have the power by lot or other means deemed equitable by them (i) to call
for redemption by any such person a number, or principal amount, of Shares or
other securities of the Trust sufficient to maintain or bring the direct or
indirect ownership of Shares or other securities of the Trust into conformity
with the requirements for such qualification and (ii) to refuse to transfer or
issue Shares or other securities of the Trust to any person whose acquisition of
the Shares or other securities of the Trust in question would result in such
disqualification. The redemption shall be effected upon such terms and
conditions as shall be determined by the Trustees.
The holders of Shares or other securities of the Trust shall upon demand
disclose to the Trustees in writing such information with respect to direct and
indirect ownership of Shares or other securities of the Trust as the Trustees
deem necessary to comply with the provisions of the Internal Revenue Code, or to
comply with the requirements of any other taxing authority.
13
ARTICLE VII
DETERMINATION OF NET ASSET VALUE,
NET INCOME AND DISTRIBUTIONS
----------------------------
SECTION 7.1. NET ASSET VALUE. The net asset value of each outstanding Share
of the Trust or of any Class or Series thereof shall be determined on such days
and at or as of such time or times as the Trustees may determine. Any reference
in this Declaration to the time at which a determination of net asset value is
made shall mean the time as of which the determination is made. The power and
duty to determine and method of determination of net asset value may be
delegated by the Trustees from time to time to the Investment Adviser, the
Administrator, the Custodian, the Transfer Agent or such other Person or Persons
as the Trustees may determine. The value of the assets of the Trust or any Class
or Series thereof shall be determined in a manner authorized by the Trustees.
From the total value of said assets, there shall be deducted all indebtedness,
interest, taxes, payable or accrued, including estimated taxes on unrealized
book profits, expenses and management charges accrued to the appraisal date, and
all other items in the nature of liabilities which shall be deemed appropriate
by the Trustees, as incurred by or allocated to the Trust or any Class or Series
thereof. The resulting amount, which shall represent the total net assets of the
Trust or Class or Series thereof, shall be divided by the number of Outstanding
Shares of the Trust or Class or Series thereof at that time and the quotient so
obtained shall be deemed to be the net asset value of the Shares of the Trust or
Class or Series thereof. The Trust may declare a suspension of the determination
of net asset value to the extent permitted by the 1940 Act. It shall not be a
violation of any provision of this Declaration if Shares are sold, redeemed or
repurchased by the Trust at a price other than one based on net asset value if
the net asset value is affected by one or more errors inadvertently made in the
pricing of portfolio securities or other investments or in accruing or
allocating income, expenses, reserves or liabilities. No provision of this
Declaration shall be construed to restrict or affect the right or ability of the
Trust to employ or authorize the use of pricing services, appraisers or any
other means, methods, procedures, or techniques in valuing the assets or
calculating the liabilities of the Trust or any Class or Series thereof.
SECTION 7.2. DIVIDENDS AND DISTRIBUTIONS. (a) The Trustees may from time to
time distribute ratably among the Shareholders of the Trust or of a Class or
Series thereof such portion of the net earnings or profits, surplus (including
paid-in surplus), capital (including paid-in capital), or assets of the Trust or
such Class or Series held by the Trustees as they may deem appropriate or
desirable. Such distributions may be made in cash, additional Shares or property
(including without limitation any type of obligations of the Trust or Class or
Series or any assets thereof), and the Trustees may distribute ratably among the
Shareholders of the Trust or Class or Series thereof additional Shares of the
Trust or Class or Series thereof issuable hereunder in such manner, at such
times, and on such terms as the Trustees may deem appropriate or desirable. Such
distributions may be among the Shareholders of the Trust or Class or Series
thereof at the time of declaring a distribution or among the Shareholders of the
Trust or Class or Series thereof at such other date or time or dates or times as
the Trustees shall determine. The Trustees may always retain from the earnings
or profits such amounts as they may deem appropriate or desirable to pay the
expenses and liabilities of the Trust or a Class or Series thereof or to meet
obligations of the Trust or a Class or Series thereof, together with such
amounts as they may deem desirable to use in the conduct of its affairs or to
retain for future requirements or extensions of the business or operations of
the Trust or such Class or Series. The Trust may adopt and offer to Shareholders
such dividend reinvestment plans, cash dividend payout plans or other
distribution plans as the Trustees may deem appropriate or desirable. The
Trustees may in their discretion determine that an account administration fee or
other similar charge may be deducted directly from the income and other
distributions paid on Shares to a Shareholder's account in any Class or Series.
(b) The Trustees may prescribe, in their absolute discretion, such bases
and times for determining the amounts for the declaration and payment of
dividends and distributions as they may deem necessary, appropriate or
desirable.
14
(c) Inasmuch as the computation of net income and gains for federal income
tax purposes may vary from the computation thereof on the books of account, the
above provisions shall be interpreted to give the Trustees full power and
authority in their absolute discretion to distribute for any fiscal year as
dividends and as capital gains distributions, respectively, additional amounts
sufficient to enable the Trust or a Class or Series thereof to avoid or reduce
liability for taxes.
SECTION 7.3. POWER TO MODIFY FOREGOING PROCEDURES. Notwithstanding any
provision contained in this Declaration, the Trustees may prescribe, in their
absolute discretion, such other means, methods, procedures or techniques for
determining the per Share net asset value of a Class or Series thereof or the
income of the Class or Series thereof, or for the declaration and payment of
dividends and distributions on any Class or Series.
ARTICLE VIII
DURATION; TERMINATION OF TRUST OR A
CLASS OR SERIES; MERGERS; AMENDMENTS
------------------------------------
SECTION 8.1. DURATION. The Trust shall continue without limitation of time
but subject to the provisions of this Article VIII. The death, declination,
resignation, retirement, removal or incapacity of the Trustees, or any one of
them, shall not operate to terminate or annul the Trust or to revoke any
existing agency or delegation or authority pursuant to the terms of this
Declaration or of the By-Laws.
SECTION 8.2. MERGER OR TERMINATION OF THE TRUST OR A SERIES OR A CLASS. The
Trust may merge or consolidate with any other corporation, association, trust or
other organization or may sell, lease or exchange all or substantially all of
the Trust property, including its good will, upon such terms and conditions and
for such consideration when and as authorized at a meeting of Shareholders
called for the purpose by the affirmative vote of the holders of two-thirds of
each Class and Series of Shares outstanding and entitled to vote (with each such
class and series separately voting thereon as a separate Class or Series), or by
an instrument or instruments in writing without a meeting, consented to by the
holders of two-thirds of each Class and Series of Shares (with each such Class
and Series separately consenting thereto as a separate Class or Series);
provided, however, that if such merger, consolidation, sale, lease or exchange
is recommended by the Trustees, the vote or written consent of the holders of a
majority of the Shares outstanding and entitled to vote shall be sufficient
authorization; and any such merger, consolidation, sale, lease or exchange shall
be deemed for all purposes to have been accomplished under and pursuant to the
statutes of the Commonwealth of Massachusetts. Upon making provision for the
payment of all outstanding obligations, taxes and other liabilities, (whether
accrued or contingent) of the Trust, the Trustees shall distribute the remaining
assets of the Trust ratably among the holders of the outstanding Shares, except
as may be otherwise provided by the Trustees with respect to any Class or Series
of Shares thereof.
Subject to authorization by the Shareholders as indicated below in this
paragraph, the Trust may at any time sell and convert into money all of the
assets of the Trust, and, upon making provision for the payment of all
outstanding obligations, taxes and other liabilities (whether accrued or
contingent) of the Trust, the Trustees shall distribute the remaining assets of
the Trust ratably among the holders of the outstanding Shares, except as may be
otherwise provided by the Trustees with respect to any Class or Series of
Shares. Such action shall first have been authorized at a meeting of
Shareholders called for the purpose by the affirmative vote of the holders of
two-thirds of each Class and Series of Shares outstanding and entitled to vote
(with each such Class and Series separately voting thereon as a separate Class
or Series), or by an instrument or instruments in writing without a meeting,
consented to by the holders of two-thirds of each Class and Series of Shares
15
(with each such Class and Series separately consenting thereto as a separate
Class or Series); provided, however, that if such action is recommended by the
Trustees, the vote or written consent of the holders of a majority of the Shares
outstanding and entitled to vote shall be sufficient authorization.
Upon completion of the distribution of the remaining proceeds or the
remaining assets as provided in this section, the Trust shall terminate and the
Trustees shall be discharged of any and all further liabilities and duties
hereunder and the right, title and interest of all parties shall be cancelled
and discharged.
SECTION 8.3. AMENDMENTS. The execution of an instrument setting forth the
establishment and designation and the relative rights of any Class or Series of
Shares in accordance with Section 5.1 hereof shall, without any authorization,
consent or vote of the Shareholders, effect an amendment of this Declaration.
Except as otherwise provided in this Section, if authorized by a majority of the
Trustees and by vote of a majority of the outstanding voting securities of the
Trust affected by the amendment (which voting securities shall, unless otherwise
provided by the Trustees, vote together on such amendment as a single class), or
by any larger vote which may be required by applicable law or this Declaration
of Trust in any particular case, the Trustees may amend or otherwise supplement
this Declaration. The Trustees may also amend this Declaration without the vote
or consent of Shareholders to change the name of the Trust or to make such other
changes as do not have a materially adverse effect on the rights or interests of
Shareholders hereunder or if they deem it necessary to conform this Declaration
to the requirements of applicable Federal laws or regulations or the
requirements of the regulated investment company provisions of the Internal
Revenue Code, but the Trustees shall not be liable for failing so to do.
No amendment may be made under this Section which shall amend, alter,
change or repeal any of the provisions of Article VIII unless the amendment
effecting such amendment, alteration, change or repeal shall receive the
affirmative vote or consent of the holders of two-thirds of each Class and
Series of Shares outstanding and entitled to vote (with each such Class and
Series separately voting thereon on consenting thereto as a separate Class or
Series). Such affirmative vote or consent shall be in addition to the vote or
consent of the holders of Shares otherwise required by law or by any agreement
between the Trust and any national securities exchange.
Nothing contained in this Declaration shall permit the amendment of this
Declaration to impair the exemption from personal liability of the Shareholders,
Trustees, officers, employees and agents of the Trust or to permit assessments
upon Shareholders.
Notwithstanding any other provision hereof, until such time as a
Registration Statement under the Securities Act of 1933, as amended, covering
the first public offering of securities of the Trust shall have become
effective, this Declaration may be terminated or amended in any respect by the
affirmative vote of a majority of the Trustees or by an instrument signed by a
majority of the Trustees.
SECTION 8.4. CERTAIN TRANSACTIONS. (a) Notwithstanding any other provision
of this Declaration and subject to the exceptions provided in sub-section (d) of
this Section 8.4, the types of transactions described in sub-section (c) of this
Section 8.4 shall require the affirmative vote or consent of the holders of
seventy-five percent (75%) of each Class of Shares outstanding (with each such
Class voting separately thereon), when a Principal Shareholder (as defined in
sub-section (b) of this Section 8.4) is determined by the Trustees to be a party
to the transaction. Such affirmative vote or consent shall be in addition to the
vote or consent of the holders of Shares otherwise required by law or by the
terms of any Class or Series, whether now or hereafter authorized, or by any
agreement between the Trust and any national securities exchange.
(b) The term "Principal Shareholder" shall mean any Person which is the
beneficial owner, directly or indirectly, of more than five percent (5%) of the
Outstanding Shares of the Trust or of any Class and shall include any
"affiliate" or "associate", as such terms are defined in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act of 1934. For the
purpose of this Section 8.4, in addition to the Shares which a Person
beneficially owns directly, (a) a Person shall be deemed to be the beneficial
owner of any Shares (i) which the Trustees determine it has the right to acquire
pursuant to any agreement or upon exercise of conversion rights or warrants, or
16
otherwise (but excluding Share options granted by the Trust) or (ii) which the
Trustees determine are beneficially owned, directly or indirectly (including
Shares deemed owned through application of clause (i) above), by any other
Person with which it or its "affiliate" or "associate" (as defined above) has
any agreement, arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of Shares, or which is its affiliate or associate,
and (b) the outstanding Shares shall include Shares deemed owned through
application of clauses (i) and (ii) above but shall not include any other Shares
which are not at the time issued and outstanding but may be issuable pursuant to
any agreement, or upon exercise of conversion rights or warrants, or otherwise.
(c) This Section 8.4 shall apply to the following transactions:
(i) The merger or consolidation of the Trust or any subsidiary of the
Trust with or into any Principal Shareholder.
(ii) The issuance of any securities of the Trust to any Principal
Shareholder for cash.
(iii) The sale, lease or exchange of all or any substantial part of
the assets of the Trust to any Principal Shareholder (except assets
determined by the Trustees to have an aggregate fair market value of
less than $1,000,000, aggregating for the purpose of such computation
all assets sold, leased or exchanged in any series of similar
transactions within a twelve-month period or assets sold in the
ordinary course of business).
(iv) The sale, lease or exchange to or with the Trust or any
subsidiary thereof, in exchange for securities of the Trust, of any
assets of any Principal Shareholder (except assets determined by the
Trustees to have an aggregate fair market value of less than
$1,000,000 aggregating for the purpose of such computation all assets
sold, leased or exchanged in any series of similar transactions within
a twelve-month period).
For purposes of this sub-section 8.4(c), the term "Principal Shareholder"
shall include all subsidiaries, affiliates, associates, or other persons acting
in concert with any Principal Shareholder.
(d) The provisions of this Section 8.4 shall not be applicable to (i) any
of the transactions described in sub-section (c) of this Section 8.4 if the
Trustees shall by resolution have approved a memorandum of understanding with
such Principal Shareholder with respect to and substantially consistent with
such transaction, or (ii) any such transaction with any Person of which a
majority of the outstanding shares of all classes of stock normally entitled to
vote in the election of directors is owned of record or beneficially by the
Trust and its subsidiaries.
(e) The Trustees shall have the power to determine for the purposes of this
Section 8.4 on the basis of information known to the Trust, whether (i) a Person
beneficially owns more than five percent (5%) of the outstanding Shares or is
otherwise a Principal Shareholder, (ii) a Person is an "affiliate" or
"associate" (as defined above) of another, (iii) the assets being acquired or
leased to or by the Trust or any subsidiary thereof constitute a substantial
part or the assets of the Trust and have an aggregate fair market value of less
than $1,000,000, (iv) the memorandum of understanding referred to in sub-section
(d) hereof is substantially consistent with the transaction covered thereby, and
(v) the provisions of the Section 8.5 otherwise apply to any Person or
transaction. Any such determination shall be conclusive and binding for all
purposes of this Section 8.4.
17
SECTION 8.5. CONVERSION. Notwithstanding any other provisions of this
Declaration, the conversion of the Trust from a "closed-end company" to an
"open-end company," as those terms are defined in Section 5(a)(2) and 5(a)(1),
respectively, of the 1940 Act shall require the affirmative vote or consent of
the holders of two-thirds of each Class outstanding (with each Class separately
voting thereon or consenting thereto as a separate Class). Such affirmative vote
or consent shall be in addition to the vote or consent of the holders of the
Shares otherwise required by law or by the terms of any Class or Series, whether
now or hereafter authorized, or by any agreement between the Trust and any
national securities exchange. However, if such conversion is recommended by at
least 75% of the Trustees then in office, the vote or written consent of the
holders of a majority of the outstanding voting securities of the Trust (which
voting securities shall vote separately on the matter by class) shall be
sufficient to authorize such conversion.
ARTICLE IX
MISCELLANEOUS
-------------
SECTION 9.1. USE OF THE WORDS "XXXXX XXXXX". Xxxxx Xxxxx Corp. (hereinafter
referred to as "EVC"), which owns (either directly or through subsidiaries) all
of the capital shares of the Investment Adviser of the Trust (or of the
investment adviser of each of the investment companies referred to in the last
paragraph of Section 2.9), has consented to the use by the Trust of the
identifying words "Xxxxx Xxxxx" in the name of the Trust. Such consent is
conditioned upon the continued employment of EVC or a subsidiary or affiliate of
EVC as Investment Adviser of the Trust or as the investment adviser of each of
the investment companies referred to in the last paragraph of Section 2.9. As
between the Trust and itself, EVC shall control the use of the name of the Trust
insofar as such name contains the identifying words "Xxxxx Xxxxx". EVC may from
time to time use the identifying words "Xxxxx Xxxxx" in other connections and
for other purposes, including, without limitation, the names of other investment
companies, trusts, corporations or businesses which it may manage, advise,
sponsor or own or in which it may have a financial interest. EVC may require the
Trust to cease using the identifying words "Xxxxx Xxxxx" in the name of the
Trust if EVC or a subsidiary or affiliate of EVC ceases to act as investment
adviser of the Trust or as the investment adviser of each of the investment
companies referred to in the last paragraph of Section 2.9.
SECTION 9.2. NOTICES. Notwithstanding any other provision of this
Declaration, any and all notices to which any Shareholder may be entitled and
any and all communications shall be deemed duly served or given if mailed,
postage prepaid, addressed to any Shareholder of record at his last known
address as recorded on the register of the Trust. If and to the extent
consistent with applicable law, a notice of a meeting, an annual report, and any
other communication to Shareholders need not be sent to a Shareholder (i) if an
annual report and a proxy statement for two consecutive shareholder meetings
have been mailed to such Shareholder's address and have been returned as
undeliverable, (ii) if all, and at least two, checks (if sent by first class
mail) in payment of distributions on Shares during a twelve-month period have
been mailed to such Shareholder's address and have been returned as
undeliverable or (iii) in any other case in which a proxy statement concerning a
meeting of security holders is not required to be given pursuant to the
Commission's proxy rules as from time to time in effect under the Securities
Exchange Act of 1934, as amended. However, delivery of such proxy statements,
annual reports and other communications shall resume if and when such
Shareholder delivers or causes to be delivered to the Trust written notice
setting forth such Shareholder's then current address.
SECTION 9.3. FILING OF COPIES, REFERENCES, HEADINGS AND COUNTERPARTS. The
original or a copy of this instrument, of any amendment hereto and of each
declaration of trust supplemental hereto, shall be kept at the office of the
Trust. Anyone dealing with the Trust may rely on a certificate by a Trustee or
18
an officer of the Trust as to whether or not any such amendments or supplemental
declarations of trust have been made and as to any matters in connection with
the Trust hereunder, and, with the same effect as if it were the original, may
rely on a copy certified by a Trustee or an officer of the Trust to be a copy of
this instrument or of any such amendment hereto or supplemental declaration of
trust.
In this instrument or in any such amendment or supplemental declaration of
trust, references to this instrument, and all expressions such as "herein",
"hereof", and "hereunder", shall be deemed to refer to this instrument as
amended or affected by any such supplemental declaration of trust. Headings are
placed herein for convenience of reference only and in case of any conflict, the
text of this instrument, rather than the headings, shall control. This
instrument may be executed in any number of counterparts each of which shall be
deemed an original, but such counterparts shall constitute one instrument. A
restated Declaration, integrating into a single instrument all of the provisions
of the Declaration which are then in effect and operative, may be executed from
time to time by a majority of the Trustees then in office and filed with the
Massachusetts Secretary of State. A restated Declaration shall, upon execution,
be conclusive evidence of all amendments and supplemental declarations contained
therein and may thereafter be referred to in lieu of the original Declaration
and the various amendments and supplements thereto.
SECTION 9.4. APPLICABLE LAW. The Trust set forth in this instrument is made
in The Commonwealth of Massachusetts, and it is created under and is to be
governed by and construed and administered according to the laws of said
Commonwealth. The Trust shall be 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 9.5. PROVISIONS IN CONFLICT WITH LAW OR REGULATIONS. (a) The
provisions of this Declaration are severable, and if the Trustees shall
determine, with the advice of legal counsel, that any of such provisions is in
conflict with the 1940 Act, the Internal Revenue Code of 1986 or with other
applicable laws and regulations, the conflicting provision shall be construed in
such a manner consistent with such law as may most closely reflect the intention
of the offending provision; provided, however, that such determination shall not
affect any of the remaining provisions of this Declaration or render invalid or
improper any action taken or omitted prior to such determination.
(b) If any provision of this Declaration shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any manner
affect such provision in any other jurisdiction or any other provision of this
Declaration in any jurisdiction.
19
IN WITNESS WHEREOF, the undersigned, being all of the current Trustees of
the Trust, have executed this instrument this 15th day of April, 2004.
/s/ Xxxxxx X. Xxxxx Xx. /s/ Xxxxx X. Xxxxxx
---------------------------------- --------------------------------
Xxxxxx X. Xxxxx Xx., as Trustee Xxxxx X. Xxxxxx, as Trustee
and not Individually and not Individually
THE COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss. Boston, Massachusetts
Then personally appeared the above named Xxxxxx X. Xxxxx Xx. and Xxxxx X.
Xxxxxx, each of whom acknowledged the foregoing instrument to be his free act
and deed.
Before me,
/s/ Xxxxx X. Xxxx
--------------------------------
My commission expires:
July 15, 2005
20
The names and addresses of all the Trustees of the Trust are as follows:
Xxxxxx X. Xxxxx Xx.
000 Xxxxxxx Xxxxx Xxxx
Xxxxxxxxx, XX 00000
Xxxxx X. Xxxxxx
00 Xxxxxx Xxxx
Xxxxxxx, XX 00000
Trust Address:
The Xxxxx Xxxxx Building
000 Xxxxx Xxxxxx
Xxxxxx, XX 00000
21
