BY-LAWS
OF
CGM CAPITAL DEVELOPMENT FUND
ARTICLE I
Agreement and Declaration
of Trust and Principal Office
1.1 Agreement and Declaration of Trust. These By-Laws shall be
subject to the Agreement and Declaration of Trust, as from time to time
amended and restated effect (the Declaration of Trust), of CGM Capital
Development Fund (the Trust), the Massachusetts business trust
established by the Declaration of Trust.
1.2 Principal Office of the Trust. The principal office of the
Trust shall be located in Boston, Massachusetts.
ARTICLE 2
Meetings of Trustees
2.1 Regular Meetings. Regular meetings of the Trustees may be
held without call or notice at such places and at such times as the
Trustees may from time to time determine, provided that notice of the
first regular meeting following any such determination shall be given
to absent Trustees.
2.2 Special Meetings. Special meetings of the Trustees may be
held, at any time and at any place designated in the call of the
meeting, when called by the Chairman of the Board, if any, the
President or the Treasurer or by two or more Trustees, sufficient
notice thereof being given to each Trustee by the Clerk or an Assistant
Clerk or by the officer or the Trustees calling the meeting.
2.3 Notice. It shall be sufficient notice to a Trustee of a
special meeting to send notice by mail at least forty-eight hours or by
telegram at least twenty-four hours before the meeting addressed to the
Trustee at his usual or last known business or residence address or to
give notice to him in person or by telephone at least twenty-four hours
before the meeting. Notice of a meeting need not be given to any
Trustee if a written waiver of notice, executed by him before or after
the meeting, is filed with the records of the meeting, or to any
Trustee who attends the meeting without protesting prior thereto or at
its commencement the lack of notice to him. Neither notice of a meeting
nor a waiver of a notice need specify the purposes of the meeting.
2.4 Quorum. At any meeting of the Trustees a majority of the
Trustees then in office shall constitute a quorum. Any meeting may be
adjourned from time to time by a majority of the votes cast upon the
question, whether or not a quorum is present, and the meeting may be
held as adjourned without further notice.
2.5 Action by Vote. When a quorum is present at any -meeting, a
majority of Trustees present may take any action, except when a larger
vote is expressly required by law, by the Declaration of Trust or by
these By-Laws.
2.6 Action by Writing. Except as required by law, any action
required or permitted to be taken at any meeting of the Trustees may be
taken without a meeting if a majority of the Trustees (or such larger
proportion thereof as shall be required by any express provision of the
Declaration of Trust or these By-Laws) consent to the action in writing
and such written consents are filed with the records of the meetings
of Trustees. Such consent shall be treated for all purposes as a vote
taken at a meeting of Trustees.
2.7 Presence through Communications Equipment. Except as
required by law, the Trustees may participate in a meeting of 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 at the same time and participation by such means shall
constitute presence in person at a meeting.
ARTICLE 3
Officers
3.1 Enumeration; Qualification. The officers of the Trust
shall be a President, a Treasurer, a Clerk, and such other officers, if
any, as the Trustees from time to time may in their discretion elect.
The Trust may also have such agents as the Trustees from time to time
may in their discretion appoint. If a Chairman of the Board is elected,
he shall be a Trustee and may but need not be a Shareholder; and any
other officer may be but none need be a Trustee or Shareholder. Any two
or more offices may be held by the same person.
3.2 Election and Tenure. The President, the Treasurer, the
Clerk and such other officers as the Trustees may in their discretion
from time to time elect shall each be elected by the Trustees to serve
until his successor is elected or qualified, or until he sooner dies,
resigns, is removed or becomes disqualified. Each officer shall hold
office and each agent shall retain authority at the pleasure of the
Trustees.
3.3 Powers. Subject to the other provisions of these By-Laws,
each officer shall have, in addition to the duties and powers herein
and in the Declaration of Trust set forth, such duties and powers as
are commonly incident to the office occupied by him or her as if the
Trust were organized as a Massachusetts business corporation and such
other duties and powers as the Trustees may from time to time
designate.
3.4 President and Vice Presidents. The President shall have the
duties and powers specified in these By-Laws and shall have such other
duties and powers as may be determined by the Trustees.
Any Vice Presidents shall have such duties and powers as shall be
designated from time to time by the Trustees.
3.5 Chief Executive Officer. The Chief Executive Officer of the
Trust shall be the Chairman of the Board, the President or such other
officer as is designated by the Trustees and shall, subject to the
control of the Trustees, have general charge and supervision of the
business of the Trust and, except as the Trustees shall otherwise
determine, preside at all meetings of the stockholders and of the
Trustees. If no such designation is made, the President shall be the
Chief Executive Officer.
3.6 Chairman of the Board. If a Chairman of the Board of
Trustees is elected, he shall have the duties and powers specified in
these By-Laws and shall have such other duties and powers as may be
determined by the Trustees.
3.7 Treasurer. The Treasurer shall be the chief financial and
accounting officer of the Trust, and shall, subject to the provisions
of the Declaration of Trust and to any arrangement made by the Trustees
with a custodian, investment adviser or manager or transfer,
shareholder servicing or similar agent, be in charge of the valuable
papers, books of account and accounting records of the Trust, and shall
have such other duties and powers as may be designated from time to
time by the Trustees or by the President.
3.8 Clerk. The Clerk shall record all proceedings of the
Shareholders and the Trustees in books to be kept therefor, which books
or a copy thereof shall be kept at the principal office of the Trust.
In the absence of the Clerk from any meeting of the Shareholders or
Trustees, an assistant Clerk, or if there be none or if he is absent, a
temporary clerk chosen at such meeting shall record the proceedings
thereof in the aforesaid books.
3.9 Resignations and Removals. Any officer may resign at any
time by written instrument signed by him and delivered to the President
or the Clerk or to a meeting of the Trustees. Such resignation shall be
effective upon receipt unless specified to be effective at some other
time. The Trustees may remove any officer with or without cause. Except
to the extent expressly provided in a written agreement with the Trust,
no officer resigning and no officer removed shall have any right to any
compensation for any period following his resignation or removal, or
any right to damages on account of such removal.
ARTICLE 4
Indemnification
4.1 Trustees, Officers, etc. The Trust shall indemnify each of
its Trustees and officers and former Trustees and officers (including
persons who serve or have in the past served at the Trusts request as
directors, officers or trustees of another organization in which the
Trust has or had any interest as a shareholder, creditor or otherwise)
(hereinafter referred to as a Covered Person) against all liabilities
and expenses, including but not limited to amounts paid in satisfaction
of judgments, in compromise or as fines, penalties or other
liabilities, and counsel fees reasonably incurred or paid by any
Covered Person in connection with the defense or disposition of any
claim, action, suit, formal or informal investigation, inquiry, 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 any alleged act or omission as a Trustee or
officer or by reason of his being or having been such a Trustee or
officer, except with respect to any matter as to which such Covered
Person shall have been finally adjudicated in any such action, suit or
other proceeding not to have acted in good faith in the reasonable
belief that such Covered Persons action was in the best interest of the
Trust and except that no Covered Person shall be indemnified against
any liability to the Trust or its Shareholders to which such Covered
Person would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in
the conduct of such Covered Persons office. Expenses, including counsel
fees so incurred by any such Covered Person, may be paid from time to
time by the Trust in advance of the final disposition of any such
action, suit or proceeding on the condition that the amounts so paid
shall be repaid to the Trust if it is ultimately determined that
indemnification of such expenses is not authorized under this Article.
4.2 Compromise Payment. As to any matter disposed of by a
compromise payment by any such Covered Person referred to in Section
4.1 above, pursuant to a consent decree or otherwise, no such
indemnification either for said payment or for any other expenses shall
be provided unless such compromise shall be approved as in the best
interests of the Trust, after notice that it involved such
indemnification, (a) by a disinterested majority of the Trustees then
in office; or (b) by a majority of the disinterested Trustees then in
office; or (c) by any disinterested person or persons to whom the
question may be referred by the Trustees, provided that in the case of
approval pursuant to clause (b) or (c) there has been obtained an
opinion in writing of independent legal counsel to the effect that such
Covered Person appears to have acted in good faith in the reasonable
belief that his or her action was in the best interests of the Trust
and that such indemnification would not protect such person against any
liability to the Trust or its Shareholders to which such person would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of office; or (d) by vote of Shareholders holding a majority of the
Shares entitled to vote thereon, exclusive of any Shares beneficially
owned by any interested Covered Person. Approval by the Trustees
pursuant to clause (a) or (b) or by any disinterested person or persons
pursuant to clause (c) of this Section shall not prevent the recovery
from any Covered Person of any amount paid to such Covered Person in
accordance with any of such clauses as indemnification if subsequently
such Covered Person is finally adjudicated by a court of competent
jurisdiction not to have acted in good faith in the reasonable belief
that such Covered Persons action was in the best interests of the Trust
or to have been liable to the Trust or its Shareholders by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of such Covered Persons office.
4.3 Indemnification Not Exclusive. The right of indemnification
hereby provided shall not be exclusive of or affect any other rights to
which any such Covered Person may be entitled. As used in this Article
4, the term Covered Person shall include such persons heirs, executors
and administrators; an interested Covered Person is one against whom
the action, suit or other proceeding in question or another action,
suit or other proceeding on the same or similar grounds is then or has
been pending; and a disinterested Trustee or disinterested person is a
Trustee or a person against whom none of such actions, suits or other
proceedings or another action, suit or other proceeding on the same
or similar grounds is then or has been pending. 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.
4.4 Contract Right: Subsequent Amendment. The right to
indemnification and advancement of expenses conferred in this Article
shall be a contract right. No amendment, termination or repeal of this
Article shall affect or diminish in any way the rights of any Covered
Person to indemnification or advancement of expenses under the
provisions hereof with respect to any suit or other proceeding arising
out of or relating to any action, omission, transaction or facts
occurring prior to the final adoption of such amendment, termination or
repeal, except with the consent of the Covered Person.
ARTICLE 5
Reports
5.1 General. The Trustees and officers shall render reports at
the time and in the manner required by the Declaration of Trust or any
applicable law. Officers shall render such additional reports as they
may deem desirable or as may from time to time be required by the
Trustees.
ARTICLE 6
Fiscal Year
6.1 General. Except as from time to time otherwise provided by
the Trustees, the fiscal year of the Trust shall end on December 31 in
each year.
ARTICLE 7
Seal
7.1 General. The seal of the Trust shall consist of a flat-
faced die with the word Massachusetts, together with the name of the
Trust and the year of its organization cut or engraved thereon, but,
unless otherwise required by the Trustees, the seal shall not be
necessary to be placed on, and its absence shall not impair the
validity of, any document, instrument or other paper executed and
delivered by or on behalf of the Trust.
ARTICLE 8
Execution of Papers
8.1 General. Except as the Trustees may generally or in
particular cases authorize the execution thereof in some other manner,
all checks, notes, drafts and other obligations and all registration
statements and amendments thereto and all applications and amendments
thereto to the Securities and Exchange Commission shall be signed by
the Chairman, if any, the President, any Vice President or the
Treasurer or any of such other officers or agents as shall be
designated for that purpose by a vote of the Trustees.
ARTICLE 9
Net Asset Value
9.1 General. The net asset value of a share of beneficial
interest of the Trust shall be determined by or under authority of the
board of trustees in accordance with the Declaration of Trust as of the
close of trading on the New York Stock Exchange on each day upon which
such Exchange is open for unrestricted trading and at such other times
as the board of trustees shall designate.
ARTICLE 10
Amendments to the By-Laws
10.1 General. These By-Laws may be amended or repealed, in whole
or in part, by a majority of the Trustees then in office at any meeting
of the Trustees.
Adopted on January 23, 1997; revised January 31, 2002; revised January
27, 2005
-6-
BUSDOCS/1082412.3
BUSDOCS/1082412.3
