AGREEMENT AND DECLARATION OF TRUST
of
FRANKLIN PRINCIPAL MATURITY TRUST
(Formerly Franklin Principal Preservation Trust)
a Massachusetts Business Trust
As Amended and Restated December 13, 1988
TABLE OF CONTENTS
FRANKLIN PRINCIPAL MATURITY TRUST
AGREEMENT AND DECLARATION OF TRUST
PAGE
ARTICLE I Name and Definitions ..................... 1
1. Name ............................................ 1
2. Definitions ..................................... 1
(a) By-Laws..................................... 1
(b) Commission and Principal Underwriter ....... 1
(c) Declaration of Trust ....................... 2
(d) Interested Person .......................... 2
(e) Investment Manager ......................... 2
(f) 1940 Act ................................... 2
(g) Person ..................................... 2
(h) Shareholder ................................ 2
(i) Shares ..................................... 2
(j) Series ..................................... 2
(k) Trust ...................................... 2
(1) Trust Property ............................. 2
(m) Trustees ................................... 2
ARTICLE II Purpose of Trust ........................... 3
ARTICLE III Shares ..................................... 3
1. Division of Beneficial Interest ................. 3
2. Ownership of Shares ............................. 4
3. Investments in the Trust ........................ 4
4. Status of Shares and Limitation of
Personal Liability .............................. 4
5. Power of Board of Trustees to Change
Provisions Relating to Shares ................... 4
6. Establishment and Designation of Series ......... 5
(a) Assets Belonging to Series ................. 6
(b) Liabilities Belonging to Series ............ 6
(c) Dividends, Distributions, Redemptions,
and Repurchases ............................ 7
(d) Voting ..................................... 7
(e) Equality ................................... 8
(f) Fractions .................................. 8
(g) Exchange Privilege ......................... 8
(h) Combination of Series ...................... 8
(i) Elimination of Series ...................... 8
7. Indemnification of Shareholders ................. 8
PAGE
ARTICLE IV The Trustees ................................ 9
1. Number, Election and Tenure ..................... 9
2. Effect of Death, Resignation, etc.
of a Trustee .................................... 10
3. Powers .......................................... 13
4. Payment of Expenses by the Trust ................ 13
5. Payment of Expenses by Shareholders ............. 14
6. Ownership of Assets of the Trust ................ 14
7. Service Contracts ............................... 14
ARTICLE V Shareholders' Voting Powers and Meetings.
1 Voting Powers .................................... 16
2. Voting Power and Meetings ....................... 17
3. Quorum and Required Vote ........................ 17
4. Action by Written Consent ....................... 18
5. Record Dates .................................... 18
6. Additional Provisions ........................... 19
ARTICLE VI Net Asset Value, Distributions,
and Redemptions ............................ 19
1. Determination of Net Asset Value, Net
Income and Distributions ........................ 19
2. Redemptions and Repurchases ..................... 19
3. Redemptions at the Option of the Trust .......... 20
ARTICLE VII Compensation and Limitation of
Liability of Trustees ...................... 21
1. Compensation .................................... 21
2. Limitation of Liability ......................... 21
3. Indemnification ................................. 21
ARTICLE VIII Miscellaneous
1. Trustees, Shareholders, etc.
Not Personally Liable; Notice .................... 22
2. Trustee's Good Faith Action, Expert
Advice, No Bond or Surety ........................ 23
3. Liability of Third Persons Dealing
with Trustees .................................... 23
4. Termination of Trust or Series ................... 23
5. Conversion to Open-End Company ................... 24
6. Merger and Consolidation ......................... 24
7. Amendments to Rights, Preferences
and Par Value of Shares .......................... 24
8. Filing of Copies, References, Headings ........... 25
9. Applicable Law .................................. 25
10. Provisions in Conflict with Law or Regulations.... 25
11. Evidence of Amendment ............................ 26
12. Trust Only ....................................... 26
13. Use of the Name "Franklin" ....................... 26
AGREEMENT AND DECLARATION OF TRUST
OF
FRANKLIN PRINCIPAL MATURITY TRUST
THIS AGREEMENT AND DECLARATION OF TRUST, originally made and entered
into as of November 22, 1988, is hereby amended and restated this 13th day
of December 1988 by the Trustees named hereunder.
WHEREAS the Trustees desire and have agreed to manage all property
coming into their hands as trustees of a Massachusetts business trust in
accordance with the provisions hereinafter set forth,
NOW, THEREFORE, the Trustees hereby direct that this amended and
restated Agreement and Declaration of Trust be filed with the Secretary of
The Commonwealth of Massachusetts and do hereby declare that they will hold
all cash, securities and other assets, which they may from time to time
acquire in any manner as Trustees hereunder, IN TRUST, and manage and
dispose of the same upon the following terms and conditions for the pro
rata benefit of the holders of Shares in this Trust.
ARTICLE I
Name and Definitions
SECTION 1. NAME. This Trust shall be known as the FRANKLIN PRINCIPAL
MATURITY TRUST and the Trustees shall conduct the business of the Trust
under that name or any other name as they may from time to time determine.
SECTION 2. DEFINITIONS. Whenever used herein, unless otherwise
required by the context or specifically provided:
(a) "By-Laws" shall mean the By-Laws of the Trust as amended from
time to time;
(b) The terms "Commission" and "Principal Underwriter" shall have
the meanings given them in the 1940 Act;
(c) "Declaration of Trust" shall mean this Agreement and
Declaration of Trust, as amended or restated from time to time;
(d) The term "Interested Person" has the meaning given it in
Section 2(a)(19) of the 1940 Act.
(e) "Investment Manager" means a party furnishing services to the
Trust pursuant to any contract described in Article IV, Section 7(a)
hereof.
(f) The "1940 Act" refers to the Investment Company Act of 1940
and the Rules and Regulations thereunder, all as amended from time to
time;
(g) "Person" means and includes individuals, corporations,
partnerships, trusts, associations, joint ventures and other entities,
whether or not legal entities, and governments and agencies and
political subdivisions thereof, whether domestic or foreign;
(h) "Shareholder' means a record owner of outstanding Shares;
(i) "Shares" means the equal proportionate units of interest into
which the beneficial interest in the Trust or in the Trust property
belonging to any series of the Trust (as the context may require)
shall be divided from time to time and includes fractions of Shares as
well as whole Shares. If the Shares in any series shall be divided
into classes, "Shares" means the Shares belonging to a particular
class (as the context may require);
(j) "Series" refers to each Series of Shares established and
designated under or in accordance with the provisions of Article III.
If no Series of Shares shall be so established and designated, all
references to Series shall be construed (as the context may require)
to refer to the Trust.
(k) The "Trust" refers to the Massachusetts business trust
established by this Agreement and Declaration of Trust, as amended
from time to time;
(1) The 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.
(m) "Trustees" refers to the persons who have signed this
Agreement and Declaration of Trust, so long as they continue in office
in accordance with the terms hereof, and all other persons who may
from time to time be duly elected or appointed to serve on the Board
of Trustees in accordance with the provisions hereof, and reference
herein to a Trustee or the Trustees shall refer to such person or
persons in their capacity as trustees hereunder;
ARTICLE II
Purpose of Trust
The purpose of the Trust is to conduct, operate and carry on the business
of a managed investment company registered under the 1940 Act through one or
more portfolios invested primarily in securities.
ARTICLE III
Shares
SECTION 1. DIVISION OF BENEFICIAL INTEREST. The beneficial interest in the
Trust shall at all times be divided into an unlimited number of Shares, with a
par value of $ .01 per Share. The Trustees may authorize the division of Shares
into separate Series and the division of Series into separate classes of Shares.
The different Series, if any, (and classes, if any, within such Series) shall be
established and designated, and the variations in the relative rights and
preferences as between the different Series (and classes) shall be fixed and
determined, by the Trustees. If no Series shall be established, the Shares shall
have the rights and preferences provided for herein and in Article III, Section
6 hereof to the extent relevant and not otherwise provided for herein, and all
references to Series shall be construed (as the context may require) to refer to
the Trust.
Subject to the provisions of Section 6 of this Article III, each Share
shall have voting rights as provided in Article V hereof, and holders of the
Shares of any Series shall be entitled to receive dividends, when, if and as
declared with respect thereto in the manner provided in Article VI, Section 1
hereof. No Shares shall have any priority or preference over any other Share of
the same class of the same Series with respect to dividends or distributions
upon termination of the Trust or of such Series made pursuant to Article VIII,
Section 4 hereof. All dividends and distributions shall be made ratably among
all Shareholders of a particular class of a particular Series from the assets
belonging to such Series according to the number of Shares of such class of such
Series held of record by such Shareholder on the record date for any dividend or
distribution or on the date of termination, as the case may be. Shareholders
shall have no preemptive or other right to subscribe to any additional Shares or
other securities issued by the Trust or any Series. The Trustees may from time
to time divide or combine the Shares of any particular Series into a greater or
lesser number of Shares of that Series without thereby changing the
proportionate beneficial interest of the Shares of that Series in the assets
belonging to that Series or in any way affecting the rights of Shares of any
other Series.
SECTION 2. OWNERSHIP OF SHARES. The ownership of Shares shall be recorded
on the books of the Trust or a transfer or similar agent for the Trust, which
books shall be maintained separately for the Shares of each Series. No
certificates certifying the ownership of Shares shall be issued except as the
Board of Trustees may otherwise determine from time to time. The Trustees may
make such rules as they consider appropriate for the transfer of Shares of each
Series 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 Series and as to the number of Shares of each
Series held from time to time by each.
SECTION 3. INVESTMENTS IN THE TRUST. The Trustees may accept investments in
the Trust from such Persons, at such times, on such terms, and for such
consideration as they from time to time authorize.
SECTION 4. STATUS OF SHARES AND LIMITATION OF PERSONAL Liability. Shares
shall be deemed to be personal property giving only the rights provided in this
instrument. Every Shareholder by virtue of having become a Shareholder shall be
held to have expressly assented and agreed to the terms hereof and to have
become a party hereto. The death of a Shareholder during the existence of the
Trust shall not operate to terminate the Trust, 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 entitles such representative
only to the rights of said deceased Shareholder under this Trust. Ownership of
Shares shall not entitle the Shareholder to any title in or to the whole or any
part of the Trust Property or right to call for a partition or division of the
same or for an accounting, nor shall the ownership of Shares constitute the
Shareholders as partners. Neither the Trust nor the Trustees, nor any officer,
employee or agent of the Trust shall have any power to bind personally any
Shareholders, nor, except as specifically provided herein, to call upon any
Shareholder for the payment of any sum of money or assessment whatsoever other
than such as the Shareholder may at any time personally agree to pay.
SECTION 5. POWER OF BOARD OF TRUSTEES TO CHANGE PROVISIONS RELATING TO
SHARES. Notwithstanding any other provision of this Declaration of Trust and
without limiting the power of the Board of Trustees to amend the Declaration of
Trust as provided elsewhere herein, the Board of Trustees shall have the power
to amend this Declaration of Trust, at any time and from time to time, in such
manner as the Board of Trustees may determine in their sole discretion, without
the need for Shareholder action, so as to add to, delete, replace or otherwise
modify any provisions relating to the Shares contained in this Declaration of
Trust, provided that before adopting any such amendment without Shareholder
approval the Board of Trustees shall determine that it is consistent with the
fair and equitable treatment of all Shareholders or that Shareholder approval is
not otherwise required by the 1940 Act or other applicable law. Shareholder
approval shall be required to convert the Trust to an "open-end company" as
provided for in Article VIII, Section 5 hereof, and to adopt any proposal for
the merger or consolidation of any Series of the Trust as provided for in
Article VIII, Section 6 hereof, to adopt any amendments to this Declaration of
Trust which would adversely affect the rights or preferences of the Shares of
any Series of the Trust or to increase or decrease the amount of the par value
of the Shares of any Series as provided for in Article VIII, Section 7 hereof.
Shareholder approval may be required to terminate the Trust or any Series as
provided for in Article VIII, Section 4 hereof.
Without limiting the generality of the foregoing, the Board of Trustees
may, for the above-stated purposes, amend the Declaration of Trust to amend any
of the provisions set forth in paragraphs (a) through (i) of Section 6 of this
Article III.
SECTION 6. ESTABLISHMENT AND DESIGNATION OF SERIES. The establishment and
designation of any Series or class of Shares shall be effective upon the
resolution by a majority of the then Trustees, setting forth such establishment
and designation and the relative rights and preferences of such Series or class
of Shares, or as otherwise provided in such resolution.
Shares of each Series established pursuant to this Section 6, unless
otherwise provided in the resolution establishing such Series, shall be of a
single class and shall have the following relative rights and preferences:
(a) ASSETS BELONGING TO SERIES. All consideration received by the
Trust for the issue or sale of any securities of a particular Series,
together with all assets in which such consideration is invested or
reinvested, all income, earnings, profits, and proceeds thereof from
whatever source derived, including, without limitation, any proceeds
derived from the sale, exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall irrevocably belong to that Series for
all purposes, subject only to the rights of creditors, and shall be so
recorded upon the books of account of the Trust. Such consideration,
assets, income, earnings, profits and proceeds thereof, from whatever
source derived, including, without limitation, any proceeds derived from
the sale, exchange or liquidation of such assets, and any funds or payments
derived from any reinvestment of such proceeds, in whatever form the same
may be, are herein referred to as "assets belonging to" that Series. In the
event that there are any assets, income, earnings, profits and proceeds
thereof, funds or payments which are not readily identifiable as belonging
to any particular Series (collectively "General Assets"), the Trustees
shall allocate such General Assets to, between or among any one or more of
the Series in such manner and on such basis as they, in their sole
discretion, deem fair and equitable, and any General Asset so allocated to
a particular Series shall belong to that Series. Each such allocation by
the Trustees shall be conclusive and binding upon the Shareholders of all
Series for all purposes.
(b) LIABILITIES BELONGING TO SERIES. The assets belonging to each
particular Series shall be charged with the liabilities of the Trust in
respect to that Series and all expenses, costs, charges and reserves
attributable to that Series, and any general liabilities of the Trust which
are not readily identifiable as belonging to any particular Series shall be
allocated and charged by the Trustees to and among any one or more of the
Series in such manner and on such basis as the Trustees in their sole
discretion deem fair and equitable. The liabilities, expenses, costs,
charges, and reserves so charged to a Series are herein referred to as
"liabilities belonging to" that Series. Each allocation of liabilities,
expenses, costs, charges and reserves by the Trustees shall be conclusive
and binding upon the holders of all Series for all purposes. Under no
circumstances shall the assets allocated or belonging to any particular
Series be charged with liabilities attributable to any other Series. All
Persons who have extended credit which has been allocated to a particular
Series, or who have a claim or contract which has been allocated to any
particular Series, shall look only to the assets of that particular Series
for payment of such credit, claim, or contract.
(c) DIVIDENDS, DISTRIBUTIONS, REDEMPTIONS, AND REPURCHASES.
Notwithstanding any other provisions of this Declaration of Trust,
including, without limitation, Article VI, no dividend or distribution
(including, without limitation, any distribution paid upon termination of
the Trust or of any Series) with respect to, nor any redemption or
repurchase of, the Shares of any Series shall be effected by the Trust
other than from the assets belonging to such Series, nor, except as
specifically provided in Section 7 of this Article III, shall any
Shareholder of any particular Series otherwise have any right or claim
against the assets belonging to any other Series except to the extent that
such Shareholder has such a right or claim hereunder as a Shareholder of
such other Series. If the Trust shall have outstanding a class of senior
security (as defined in the 1940 Act), any dividend or distribution on or
purchase of the Shares shall be in compliance with Section 18 of the 1940
Act and, if applicable, any indenture with respect to such senior security.
The Trustees shall have full discretion, to the extent not inconsistent
with the 1940 Act, to determine which items shall be treated as income and
which items as capital; and each such determination and allocation shall be
conclusive and binding upon the Shareholders.
(d) VOTING. All Shares of the Trust entitled to vote on a matter shall
vote separately by Series (and, if applicable, by class): that is, the
Shareholders of each Series shall have the right to approve or disapprove
matters affecting the Trust and each respective Series as if the Series
were separate companies. There are, however, two exceptions to voting by
separate Series (or classes). First, if the 1940 Act requires all Shares of
the Trust to be voted in the aggregate without differentiation between the
separate Series (or classes), then all the Trust's Shares shall be entitled
to vote on a one-vote-per-Share basis. Second, if any matter affects only
the interests of some but not all Series (or classes), then only the
Shareholders of such affected Series (or classes) shall be entitled to vote
on the matter.
(e) EQUALITY. All the Shares of each particular Series shall represent
an equal proportionate interest in the assets belonging to that Series
(subject to the liabilities belonging to that Series and such rights and
preferences as may have been established and designated with respect to
classes of Shares within such Series), and each Share of any particular
Series shall be equal to each other Share of that Series.
(f) FRACTIONS. Any fractional Share of a Series shall carry
proportionately all the rights and obligations of a whole share of that
Series, including rights with respect to voting, receipt of dividends and
distributions, redemption of Shares and termination of the Trust.
(g) EXCHANGE PRIVILEGE. The Trustees shall have the authority to
provide that the holders of Shares of any Series shall have the right to
exchange said Shares for Shares of one or more other Series of Shares in
accordance with such requirements and procedures as may be established by
the Trustees.
(h) COMBINATION OF SERIES. The Trustees shall have the authority,
without the approval of the Shareholders of any Series unless otherwise
required by applicable law, to combine the assets and liabilities belonging
to any two or more Series into assets and liabilities belonging to a single
Series.
(i) ELIMINATION OF SERIES. At any time that there are no Shares
outstanding of any particular Series (or class) previously established and
designated, the Trustees may by resolution of a majority of the then
Trustees abolish that Series (or class) and rescind the establishment and
designation thereof.
SECTION 7. INDEMNIFICATION OF SHAREHOLDERS. In case any Shareholder or
former Shareholder shall be held to be personally liable solely by reason of his
or her being or having been a Shareholder and not because of his or her acts or
omissions or for some other reason, the Shareholder or former Shareholder (or
his or her heirs, executors, administrators, or other legal representatives or
in the case of a corporation or other entity, its corporate or other general
successor) shall be entitled out of the assets of the Trust to be held harmless
from and indemnified against all loss and expense arising from such liability.
ARTICLE IV
The Board of Trustees
SECTION 1. NUMBER, ELECTION AND TENURE. The number of Trustees constituting
the Board of Trustees shall be fixed from time to time by a written instrument
signed or by resolution approved at a duly constituted meeting by a majority of
the Board of Trustees, provided, however, that the number of Trustees shall in
no event be less than three (3) nor more than fifteen (15). The Board of
Trustees, by action of a majority of the then Trustees at a duly constituted
meeting, may fill vacancies in the Board of Trustees or remove Trustees with or
without cause. Each Trustee shall serve during the continued lifetime of the
Trust until he dies, resigns, is declared bankrupt or incompetent by a court of
appropriate jurisdiction, or is removed, or, if sooner, until the next meeting
of Shareholders called for the purpose of electing Trustees and until the
election and qualification of his successor. Any Trustee may resign at any time
by written instrument signed by him and delivered to any officer of the Trust or
to a meeting of the Trustees. Such resignation shall be effective upon receipt
unless specified to be effective at some other time. Except to the extent
expressly provided in a written agreement with the Trust, no Trustee resigning
and no Trustee 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. The Shareholders may fix the number of Trustees and elect Trustees at
any meeting of Shareholders called by the Trustees for that purpose.
SECTION 2. EFFECT OF DEATH, RESIGNATION, ETC., OF A TRUSTEE. The death,
declination, resignation, retirement, removal, or incapacity of one or more
Trustees, or all of them, shall not operate to annul the Trust or to revoke any
existing agency created pursuant to the terms of this Declaration of Trust.
Whenever a vacancy in the Board of Trustees shall occur, until such vacancy is
filled as provided in Article IV, Section 1, the Trustees in office, regardless
of their number, shall have all the powers granted to the Trustees and shall
discharge all the duties imposed upon the Trustees by this Declaration of Trust.
As conclusive evidence of such vacancy, a written instrument certifying the
existence of such vacancy may be executed by an officer of the Trust or by a
majority of the Board of Trustees. In the event of the death, declination,
resignation, retirement, removal, or incapacity of all the then Trustees within
a short period of time and without the opportunity for at least one Trustee
being able to appoint additional Trustees to fill vacancies, the Trust's
investment adviser or investment advisers jointly, if there is more than one,
are empowered to appoint new Trustees subject to the provisions of Section 16(a)
of the 1940 Act.
SECTION 3. POWERS. Subject to the provisions of this Declaration of Trust,
the business of the Trust shall be managed by the Board of Trustees, and such
Board shall have all powers necessary or convenient to carry out that
responsibility including the power to engage in securities transactions of all
kinds on behalf of the Trust. Without limiting the foregoing, the Trustees may:
adopt By-Laws not inconsistent with this Declaration of Trust providing for the
regulation and management of the affairs of the Trust and may amend and repeal
them to the extent that such By-Laws do not reserve that right to the
Shareholders; fill vacancies in or remove from their number, and may elect and
remove such officers and appoint and terminate such agents as they consider
appropriate; appoint from their own number and establish and terminate one or
more committees consisting of two or more Trustees which may exercise the powers
and authority of the Board of Trustees to the extent that the Trustees
determine; employ one or more custodians of the assets of the Trust and may
authorize such custodians to employ subcustodians and to deposit all or any part
of such assets in a system or systems for the central handling of securities or
with a Federal Reserve Bank, retain a transfer agent or a shareholder servicing
agent, or both; provide for the issuance and distribution of securities,
including Shares and debt obligations in the form of senior fixed-rate notes, by
the Trust directly or through one or more Principal Underwriters or otherwise;
redeem, repurchase and transfer securities issued by the Trust pursuant to
applicable law; set record dates for the determination of Shareholders with
respect to various matters; declare and pay dividends and distributions to
Shareholders of each Series from the assets of such Series; pay interest on and
the principal amount of any notes or other debt obligations issued by the Trust;
and in general delegate such authority as they consider desirable to any officer
of the Trust, to any committee of the Trustees and to any agent or employee of
the Trust or to any such custodian, transfer or shareholder servicing agent, or
Principal Underwriter. Any determination as to what is in the interests of the
Trust made by the Trustees in good faith shall be conclusive. In construing the
provisions of this Declaration of Trust, the presumption shall be in favor of a
grant of power to the Trustees.
Without limiting the foregoing, the Board of Trustees shall have power and
authority:
(a) To invest and reinvest cash, to hold cash uninvested, and to
subscribe for, invest in, reinvest in, purchase or otherwise acquire, own,
hold, pledge, sell, assign, transfer, exchange, distribute, write options
on, lend or otherwise deal in or dispose of contracts for the future
acquisition or delivery of fixed income or other securities, and securities
of every nature and kind, including, without limitation, all types of
bonds, notes, debentures, stocks, negotiable or non-negotiable instruments,
obligations, evidences of indebtedness, certificates of deposit or
indebtedness, commercial paper, repurchase agreements, bankers'
acceptances, and other securities of any kind, issued, created, guaranteed,
or sponsored by any and all Persons, including, without limitation, states,
territories, and possessions of the United States and the District of
Columbia and any political subdivision, agency, or instrumentality thereof,
any foreign government or any political subdivision of the U.S. Government
or any foreign government, or any international instrumentality, or any
bank or savings institution, or any corporation or organization organized
under the laws of the United States or of any state, territory, or
possession thereof, or any corporation or organization organized under any
foreign law, or in "when issued" contracts for any such securities, or in
foreign currencies, or in forward delivery contracts, contracts for future
delivery, options and similar instruments, to change the investments of the
assets of the Trust, and to exercise any and all rights, powers, and
privileges of ownership or interest in respect of any and all such
investments of every kind and description, including, without limitation,
the right to consent and otherwise act with respect thereto, with power to
designate one or more Persons, to exercise any of said rights, powers, and
privileges in respect of any of said instruments;
(b) To sell, exchange, lend, pledge, mortgage, hypothecate, lease, or
write options with respect to or otherwise deal in any property rights
relating to any or all of the assets of the Trust;
(c) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and
deliver proxies or powers of attorney to such person or persons as the
Trustees shall deem proper, granting to such person or persons such power
and discretion with relation to securities or property as the Trustees
shall deem proper;
(d) To exercise powers and right of subscription or otherwise which in
any manner arise out of ownership of securities;
(e) To hold any security or property in a form not indicating any
trust, whether in bearer, unregistered or other negotiable form, or in its
own name or in the name of a custodian or subcustodian or a nominee or
nominees or otherwise;
(f) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or issuer of any security which
is held in the Trust; to consent to any contract, lease, mortgage, purchase
or sale of property by such corporation or issuer; and to pay calls or
subscriptions with respect to any security held in the Trust;
(g) To join with 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;
(h) To compromise, arbitrate or otherwise adjust claims in favor of or
against the Trust or any matter in controversy, including but not limited
to claims for taxes;
(i) To enter into joint ventures, general or limited partnerships and
any other combinations or associations;
(j) To borrow funds or other property in the name of the Trust
exclusively for Trust purposes;
(k) To endorse or guarantee the payment of any notes or other
obligations of any Person; to make contracts of guaranty or suretyship, or
otherwise assume liability for payment thereof;
(1) To issue one or more classes of senior securities (as defined in
the 0000 Xxx) including general unsecured obligations of the Trust, and to
enter into indentures or agreements relating thereto.
(m) To 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 or payment of distributions and principal on its
portfolio investments, and insurance policies insuring the Shareholders,
Trustees, officers, employees, agents, investment advisers, 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 Trustee,
officer, employee, agent, investment adviser, 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 liability; and
(n) To adopt, establish and carry out pension, profit-sharing, share
bonus, share purchase, savings, thrift and other retirement, incentive and
benefit plans, trusts and provisions, including the purchasing of life
insurance and annuity contracts as a means of providing such retirement and
other benefits, for any or all of the Trustees, officers, employees and
agents of the Trust.
The Trustees shall not be limited to investing in obligations maturing
before the possible termination of the Trust or one or more of its Series. The
Trustees shall not in any way be bound or limited by any present or future law
or custom in regard to investment by fiduciaries. The Trustees shall not be
required to obtain any court order to deal with any assets of the Trust or take
any other action hereunder.
SECTION 4. PAYMENT OF EXPENSES BY THE TRUST. The Trustees are authorized to
pay or cause to be paid out of the principal or income of the Trust, or partly
out of the principal and partly out of income, as they deem fair, all expenses,
fees, charges, taxes and liabilities incurred or arising in connection with the
Trust, or in connection with the management thereof, including, but not limited
to, the Trustees' compensation and such expenses and charges for the services of
the Trust's officers, employees, investment adviser or manager, principal
underwriter, auditors, counsel, custodian, transfer agent, registrar, dividend
disbursing agent, indenture trustee, shareholder servicing agent, and such other
agents or independent contractors and such other expenses and charges as the
Trustees may deem necessary or proper to incur.
SECTION 5. PAYMENT OF EXPENSES BY SHAREHOLDERS. The Trustees shall have the
power, as frequently as they may determine, to cause each Shareholder, or each
Shareholder of any particular Series, to pay directly, in advance or arrears,
for charges of the Trust's custodian or transfer, Shareholder servicing or
similar agent, an amount fixed from time to time by the Trustees, by setting off
such charges due from such Shareholder from declared but unpaid dividends owed
such Shareholder and/or by reducing the number of shares in the account of such
Shareholder by that number of full and/or fractional Shares which represents the
outstanding amount of such charges due from such Shareholder.
SECTION 6. OWNERSHIP OF ASSETS OF THE TRUST. Title to all of the assets of
the Trust shall at all times be considered as vested in the Trustees as joint
tenants except that the Trustees shall have power to cause legal title to any
Trust Property to be held by or in the name of one or more of the Trustees, or
in the name of the Trust, or in the name of any other Person as nominee, on such
terms as the Trustees may determine. 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 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. Such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered.
SECTION 7. SERVICE CONTRACTS.
(a) Subject to such requirements and restrictions as may be set forth
in the By-Laws, the Trustees may, at any time and from time to time,
contract for exclusive or nonexclusive advisory, management, fiduciary
and/or administrative services for the Trust or for any Series with any
corporation, trust, association or other organization; and any such
contract may contain such other terms as the Trustees may determine,
including without limitation, authority for the Investment Manager,
Investment Adviser or Administrator to determine from time to time without
prior consultation with the Trustees what investments shall be purchased,
held, sold or exchanged and what portion, if any, of the assets of the
Trust shall be held uninvested and to make changes in the Trust's
investments, or such other activities as may specifically be delegated to
such party.
(b) The Trustees may also, at any time and from time to time, contract
with any corporation, trust, association or other organization, appointing
it exclusive or nonexclusive distributor or Principal Underwriter for the
Shares of one or more of the Series or other securities to be issued by the
Trust. Every such contract shall comply with such requirements and
restrictions as may be set forth in the By-Laws; and any such contract may
contain such other terms as the Trustees may determine.
(c) The Trustees are also empowered, at any time and from time to
time, to contract with any corporations, trusts, associations or other
organizations, appointing it or them the custodian, transfer agent,
registrar, dividend disbursing agent, indenture trustee, corporate finance
services agent, and/or shareholder servicing agent for the Trust or one or
more of its Series. Every such contract shall comply with such requirements
and restrictions as may be set forth in the By-Laws or stipulated by
resolution of the Trustees.
(d) The Trustees are further empowered, at any time and from time to
time, to contract with any entity to provide such other services to the
Trust or one or more of the Series, as the Trustees determine to be in the
best interests of the Trust and the applicable Series.
(e) The fact that:
(i) any of the Shareholders, Trustees, or officers of the Trust
is a shareholder, director, officer, partner, trustee, employee,
manager, adviser, principal underwriter, distributor, or affiliate 6r
agent of or for any corporation, trust, association, or other
organization, or for any parent or affiliate of any organization with
which an advisory, management or administration contract, or principal
underwriter's or distributor's contract, or transfer, shareholder
servicing or other type of service contract may have been or may
hereafter be made, or that any such organization, or any parent or
affiliate thereof, is a Shareholder or has an interest in the Trust,
or that
(ii) any corporation, trust, association or other organization
with which an advisory, management or administration contract or
principal underwriter's or distributor's contract, or transfer,
shareholder servicing or other type of service contract may have been
or may hereafter be made also has an advisory, management or
administration contract, or principal underwriter's or distributor's
contract, or transfer, shareholder servicing or other service contract
with one or more other corporations, trust, associations, or other
organizations, or has other business or interests,
shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing the
same, or create any liability or accountability to the Trust or its
Shareholders, provided approval of each such contract is made pursuant to the
requirements of the 1940 Act.
ARTICLE V
Shareholders' Voting Powers and Meetings
SECTION 1. VOTING POWERS. Subject to the provisions of Article III, Section
6(d), the Shareholders shall have power to vote only (i) for the election of
Trustees as provided in Article IV, Section 1, (ii) 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,
(iii) on any matter requiring Shareholder approval under applicable state or
federal law, including all matters requiring shareholder approval under the 1940
Act, (iv) with respect to the termination of the Trust or any Series to the
extent and as provided in Article VIII, Section 4 hereof, (v) with respect to
the conversion of the Trust to an open-end company as provided in Article VIII,
Section 5 hereof, (vi) with respect to any proposal for the merger or
consolidation of any Series of the Trust as provided in Article VIII, Section 6
hereof, (vii) with respect to any amendment to this Declaration of Trust or any
other action adversely affecting the rights and preferences of the Shares of any
Series of the Trust or increasing or decreasing the amount of the par value of
the Shares of any Series as provided in Article VIII, Section 7 hereof, and
(viii) with respect to such additional matters relating to the Trust as may be
required by this Declaration of Trust, the By-Laws or any registration of the
Trust with the Commission (or any successor agency) or any state, or as the
Trustees may consider necessary or desirable. 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. There shall be no
cumulative voting in the election of Trustees. Shares may be voted in person or
by proxy. A proxy with respect to Shares held in the name of two or more persons
shall be valid if executed by any one of them unless at or prior to exercise of
the proxy the Trust receives a specific written notice to the contrary from any
one of them. A proxy purporting to be executed by or on behalf of a Shareholder
shall be deemed valid unless challenged at or prior to its exercise and the
burden of proving invalidity shall rest on the challenger. At any time when no
Shares of a Series are outstanding, the Trustees may exercise all rights of
Shareholders of that Series with respect to matters affecting that Series, take
any action required by law, this Declaration of Trust or the By-Laws, to be
taken by the Shareholders.
SECTION 2. VOTING POWER AND MEETINGS. Meetings of the Shareholders may be
called by the Trustees for the purpose of electing Trustees as provided in
Article IV, Section 1 and for such other purposes as may be prescribed by law,
by this Declaration of Trust or by the By-Laws. Meetings of the Shareholders may
also be called by the Trustees from time to time for the purpose of taking
action upon any other matter deemed by the Trustees to be necessary or
desirable. A meeting of Shareholders may be held at any place designated by the
Trustees. Written notice of any meeting of Shareholders shall be given or caused
to be given by the Trustees by mailing such notice at least seven (7) days
before such meeting, postage prepaid, stating the time and place of the meeting,
to each Shareholder at the Shareholder's address as it appears on the records of
the Trust. Whenever notice of a meeting is required to be given to a Shareholder
under this Declaration of Trust or the By-Laws, a written waiver thereof,
executed before or after the meeting by such Shareholder or his attorney
thereunto authorized and filed with the records of the meeting, shall be deemed
equivalent to such notice.
SECTION 3. QUORUM AND REQUIRED VOTE. Except when a larger quorum is
required by applicable law, by the By-Laws or by this Declaration of Trust,
forty percent (40%) of the Shares entitled to vote shall constitute a quorum at
a Shareholders' meeting. When any one or more Series (or class) is to vote as a
single class separate from any other Shares which are to vote on the same
matters as a separate class or classes, forty percent (40%) of the Shares of
each such Series (or class) entitled to vote shall constitute a quorum at a
Shareholder's meeting of that Series. Any meeting of Shareholders may be
adjourned from time to time by a majority of the votes properly cast upon the
question of adjourning a meeting to another date and time, whether or not a
quorum is present, and the meeting may be held as adjourned within a reasonable
time after the date set for the original meeting without further notice. Subject
to the provisions of Article III, Section 6(d), when a quorum is present at any
meeting, a majority of the Shares voted shall decide any questions and a
plurality shall elect a Trustee, except when a larger vote is required by any
provision of this Declaration of Trust or the By-Laws or by applicable law.
SECTION 4. ACTION BY WRITTEN CONSENT. Any action taken by Shareholders may
be taken without a meeting if Shareholders holding a majority of the Shares
entitled to vote on the matter (or such larger proportion thereof as shall be
required by any express provision of this Declaration of Trust or by the
By-Laws) and holding a majority (or such larger proportion as aforesaid) of the
Shares of any Series entitled to vote separately on the matter consent to the
action in writing and such written consents are filed with the records of the
meetings of Shareholders. Such consent shall be treated for all purposes as a
vote taken at a meeting of Shareholders.
SECTION 5. RECORD DATES. For the purpose of determining the Shareholders of
any Series who are entitled to vote or act at any meeting or any adjournment
thereof, the Trustees may from time to time fix a time, which shall be not less
than ten (10) or more than ninety (90) days before the date of any meeting of
Shareholders, as the record date for determining the Shareholders of such Series
(or class) having the right to notice of and to vote at such meeting and any
adjournment thereof, and in such case only Shareholders of record on such record
date shall have such right, notwithstanding any transfer of shares on the books
of the Trust after the record date. For the purpose of determining the
Shareholders of any Series who are entitled to receive payment of any dividend
or of any other distribution, the Trustees may from time to time fix a date,
which shall be before the date for the payment of such dividend or such other
payment, as the record date for determining the Shareholders of such Series
having the right to receive such dividend or distribution. Without fixing a
record date the Trustees may for voting and/or distribution purposes close the
register or transfer books for one or more Series for all or any part of the
period between a record date and a meeting of Shareholders or the payment of a
distribution. Nothing in this Section shall be construed as precluding the
Trustees from setting different record dates for different Series.
SECTION 6. ADDITIONAL PROVISIONS. The By-Laws may include further
provisions for Shareholders' votes and meetings and related matters.
ARTICLE VI
Net Asset Value, Distributions, and Redemptions
SECTION 1. DETERMINATION OF NET ASSET VALUE, NET INCOME, AND DISTRIBUTIONS.
Subject to Article III, Section 6 hereof, the Trustees, in their absolute
discretion, may prescribe and shall set forth in the By-laws or in a duly
adopted vote of the Trustees such bases and time for determining the per Share
or net asset value of the Shares of any Series or net income attributable to the
Shares of any Series, or the declaration and payment of dividends and
distributions on the Shares of any Series, as they may deem necessary or
desirable.
SECTION 2. REDEMPTIONS AND REPURCHASES.
(a) The Trust may repurchase on the open market or make a tender offer
for an unlimited number of Shares, from time to time as determined by the
Trustees, for the purpose of reducing or eliminating the amount of any
discount in the trading prices of such Shares relative to their net asset
values or to increase the net asset values of such Shares. The Trust may
not repurchase or tender for Shares if, as a result of such repurchase or
tender, the asset coverage (as defined in Section 18(h) of the 0000 Xxx) on
any senior security (as defined in the 1940 Act) then outstanding would be
reduced to less than the minimum asset coverage required with respect to
that senior security under Section 18 of the 1940 Act or would violate any
asset coverage or other requirements contained in any indenture with
respect to such senior security.
(b) If the Board of Trustees and the Shareholders shall approve the
conversion of the Trust from a "closed-end company" to an "open-end
company" as those terms are defined in the 1940 Act, then following such
conversion, the Trust shall purchase such Shares (and Shares of any
subsequent Series or class) as are offered by any Shareholder for
redemption upon the presentation of a proper instrument of transfer
together with a request directed to the Trust or a person designated by the
Trust that the Trust purchase such Shares or in accordance with such other
procedures for redemption as the Trustees may from time to time authorize;
and the Trust will pay therefor the net asset value thereof, as determined
in accordance with the By-Laws and applicable law, next determined. Payment
for said Shares shall be made by the Trust to the Shareholder within seven
days after the date on which the request is made in proper form. The
obligation set forth in this Section 2 is subject to the provision that, in
the event that at any time the New York Stock Exchange is closed for other
than weekends or holidays, or if permitted by the Rules of the Commission
during periods when trading on the Exchange is restricted or during any
emergency which makes it impracticable for the Trust to dispose of the
investments of the applicable Series or to determine fairly the value of
the net assets belonging to the applicable class or Series or during any
other period permitted by order of the Commission for the protection of
investors, such obligations may be suspended or postponed by the Trustees.
(c) The redemption price for Shares redeemed pursuant to Paragraph (b)
of this Section 2 may in any case or cases be paid wholly or partly in kind
if the Trustees determine that such payment is advisable in the interest of
the remaining Shareholders of the class or Series for which the Shares are
being redeemed. Subject to the foregoing, the fair value, selection and
quantity of securities or other property so paid or delivered as all or
part of the redemption price may be determined by or under authority of the
Trustees. In no case shall the Trust be liable for any delay of any
corporation or other person in transferring securities selected for
delivery as all or part of any payment in kind.
SECTION 3. REDEMPTIONS AT THE OPTION OF THE TRUST. If the Board of Trustees
and the Shareholders shall approve the conversion of the Trust from a
"closed-end company" to an "open-end company" as those terms are defined in the
1940 Act, the Trust shall have the right at its option and at any time to redeem
Shares of any Shareholder at the net asset value thereof as described in Section
1 of this Article VI: (i) if at such time such Shareholder owns Shares of any
class or Series having an aggregate net asset value of less than an amount
determined from time to time by the Trustees, but not to exceed the stated
minimum purchase amount with respect to such class of Shares, or (ii) to the
extent that such Shareholder owns Shares equal to or in excess of a percentage,
determined from time to time by the Trustees, of the outstanding Shares of the
Trust or of any class or Series.
ARTICLE VII
Compensation and Limitation of Liability of Trustees
SECTION 1. COMPENSATION. The Trustees as such shall be entitled to
reasonable compensation from the Trust, and they may fix the amount of such
compensation. Nothing herein shall in any way prevent the employment of any
Trustee for advisory, management, legal, accounting, investment banking or other
services and payment for the same by the Trust.
SECTION 2. LIMITATION OF LIABILITY. The Trustees shall not be responsible
or liable in any event for any neglect or wrong-doing of any officer, agent,
employee, manager or Principal Underwriter of the Trust, nor shall any Trustee
be responsible for the act or omission of any other Trustee, but nothing herein
contained shall protect any Trustee against any liability to which he would
otherwise be subject by reason of wilful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office.
Every note, bond, contract, instrument, certificate or undertaking and
every other act or thing whatsoever issued, executed or done by or on behalf of
the Trust or the Trustees or any of them in connection with the Trust shall be
conclusively deemed to have been issued, executed or done only in or with
respect to their or his capacity as Trustees or Trustee, and such Trustees or
Trustee shall not be personally liable thereon.
SECTION 3. INDEMNIFICATION. The Trustees shall be entitled and empowered to
the fullest extent permitted by law to purchase with Trust assets insurance for
and to provide by resolution or in the By-Laws for indemnification out of Trust
assets for liability and for all expenses reasonably incurred or paid or
expected to be paid by a Trustee or officer in connection with any claim,
action, suit or proceeding in which he becomes involved by virtue of his
capacity or former capacity with the Trust. The provisions, including any
exceptions and limitations concerning indemnification, may be set forth in
detail in the By-Laws or in a resolution of the Board of Trustees.
ARTICLE VIII
Miscellaneous
SECTION 1. TRUSTEES, SHAREHOLDERS, ETC., NOT PERSONALLY LIABLE; NOTICE. All
Persons extending credit to, contracting with or having any claim against the
Trust or any Series shall look only to the assets of the Trust, or, to the
extent that the liability of the Trust may have been expressly limited by
contract to the assets of a particular Series, only to the assets belonging to
the relevant Series, for payment under such credit, contract or claim; and
neither the Shareholders nor the Trustees, nor any of the Trust's officers,
employees or agents, whether past, present or future, shall be personally liable
therefor. Nothing in this Declaration of Trust shall protect any Trustee against
any liability to which such Trustee would otherwise be subject by reason of
wilful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office of Trustee.
Every note, bond, contract, instrument, certificate or undertaking made or
issued on behalf of the Trust by the Board of Trustees, by any officers or
officer or otherwise may include a notice that this Declaration of Trust is on
file with the Secretary of The Commonwealth of Massachusetts and may recite that
the note, bond, contract, instrument, certificate, or undertaking was executed
or made by or on behalf of the Trust or by them as Trustee or Trustees or as
officers or officer or otherwise and not individually and that the obligations
of such instrument are not binding upon any of them or the Shareholders
individually but are binding only upon the assets and property of the Trust or
upon the assets belonging to the Series for the benefit of which the Trustees
have caused the note, bond, contract, instrument, certificate or undertaking to
be made or issued, and may contain such further recital as he or they may deem
appropriate, but the omission of any such recital shall not operate to bind any
Trustee or Trustees or officer or officers or Shareholders or any other person
individually.
SECTION 2. TRUSTEE'S GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR SURETY.
The exercise by the Trustees of their powers and discretions hereunder shall be
binding upon everyone interested. A Trustee shall be liable solely for his own
wilful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office of Trustee, and shall not be liable
for errors of judgment or mistakes of fact or law. The Trustees may take advice
of counsel or other experts with respect to the meaning and operation of this
Declaration of Trust, and shall be under no liability for any act or omission in
accordance with such advice nor for failing to follow such advice. The Trustees
shall not be required to give any bond as such, nor any surety if a bond is
required.
SECTION 3. LIABILITY OF THIRD PERSONS DEALING WITH TRUSTEES. No Person
dealing with the Trustees shall be bound to make any inquiry concerning the
validity of any transaction made or to be made by the Trustees or to see to the
application of any payments made or property transferred to the Trust or upon
its order.
SECTION 4. TERMINATION OF TRUST OR SERIES. Unless otherwise terminated as
provided herein, the Trust shall continue until May 31, 2001 and thereafter only
for such limited period of time as shall be required to wind up the affairs of
the Trust as specified herein. The Trust and any Series may be terminated at any
time on or after May 31, 2001 by the Trustees by written notice to the
Shareholders of the Trust or the affected Series. If the 1940 Act shall require
Shareholder approval of such termination, such termination shall be effective if
approved by vote of a majority of the outstanding Shares of the Trust entitled
to vote, voting as a whole (or by Series with respect to the termination of a
Series), or 67% of the outstanding Shares voting at a meeting if more than 50%
of such Shares are present and represented by proxy, whichever is less. If such
Shareholder vote shall be required and shall not be obtained, the Trust or the
Series shall continue under the direction of the Board of Trustees. The Trust
shall not be terminated prior to May 31, 2001, unless such termination has been
authorized by vote of at least two-thirds (66-2/3%) of the Shares the Trust
entitled to vote, voting as a whole. Notwithstanding any other provision of this
Declaration of Trust, the Shareholder voting requirements contained in this
Section may not be reduced except by the vote of at least two-thirds (66-2/3%)
of the Shares of the Trust entitled to vote on such termination.
Upon termination of the Trust (or any Series, as the case may be), after
paying or otherwise providing for all charges, taxes, expenses and liabilities
belonging, severally, to each Series (or the applicable Series, as the case may
be), whether due or accrued or anticipated as may be determined by the Trustees,
the Trust shall, in accordance with such procedures as the Trustees consider
appropriate, reduce the remaining assets belonging, severally, to each Series
(or the applicable Series, as the case may be), to distributable form in cash or
shares or other securities, or any combination thereof, and distribute the
proceeds belonging to each Series (or the applicable Series, as the case may
be), to the Shareholders of that Series, as a Series, ratably according to the
number of Shares of that Series held by the several Shareholders on the date of
termination.
SECTION 5. CONVERSION TO OPEN-END COMPANY. The Trust shall not be converted
from a "closed-end company" to an "open-end company," as those terms are defined
in Sections 5(a)(2) and 5(a)(1), respectively, of the 1940 Act if such
conversion is approved by a majority of the Board of Trustees and authorized by
the vote of a majority of the outstanding Shares of each Series of the Trust
entitled to vote, voting separately by Series, or 67% of the outstanding Shares
of each such Series voting by Series at a meeting if more than 50% of the Shares
of each such Series are present and represented by proxy, whichever is less;
provided that any such conversion prior to May 31, 2001, shall require approval
by at least two-thirds of the Board of Trustees and must be authorized by vote
of at least two-thirds (66-2/3%) of the Shares of the Trust entitled to vote,
voting as a whole. Notwithstanding any other provision of this Declaration of
Trust, the Shareholder voting requirement contained in this Section may not be
reduced except by the vote of at least two-thirds (66-2/3%) of the Shares of the
Trust entitled to vote on such conversion.
SECTION 6. MERGER AND CONSOLIDATION. The Trustees may cause the Trust or
one or more of its Series to be merged into or consolidated with another Trust
or company or the Shares exchanged under or pursuant to any state or federal
statute, if any, or otherwise to the extent permitted by law. Such merger or
consolidation or Share exchange must be authorized by vote of a majority of the
outstanding Shares of the Trust, as a whole, or any affected Series, as may be
applicable, or 67% of the outstanding Shares voting at a meeting if more than
50% of such Shares are present and represented by proxy, whichever is less;
provided that in all respects not governed by statute or applicable law, the
Trustees shall have power to prescribe the procedure necessary or appropriate to
accomplish a sale of assets, merger or consolidation.
SECTION 7. AMENDMENTS TO RIGHTS, PREFERENCES AND PAR VALUE OF SHARES. Any
amendment to this, Declaration of Trust or any other action adversely affecting
to a material degree the rights and preferences of the Shares of any Series of
the Trust or increasing or decreasing the amount of the par value of the Shares
of any Series must be authorized by the vote of a majority of the outstanding
Shares of the Trust, as a whole, or any affected Series, as may be applicable,
or 67% of the outstanding Shares voting at a meeting if more than 50% of such
Shares are present and represented by proxy, whichever is less.
SECTION 8. FILING OF COPIES, REFERENCES, HEADINGS. The original or a copy
of this instrument and of each restatement and/or amendment hereto shall be kept
at the office of the Trust where it may be inspected by any Shareholder. A copy
of this instrument and of each restatement and/or amendment hereto shall be
filed by the Trust with the Secretary of The Commonwealth of Massachusetts and
with any other governmental office where such filing may from time to time be
required. Anyone dealing with the Trust may rely on a certificate by an officer
of the Trust as to whether or not any such restatement and/or amendments 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
an officer of the Trust to be a copy of this instrument or of any such
restatement and/or amendments. In this instrument and in any such restatement
and/or amendment, references to this instrument, and all expressions like
"herein", "hereof" and "hereunder", shall be deemed to refer to this instrument
as amended or affected by any such amendments. Headings are placed herein for
convenience of reference only and shall not be taken as a part hereof or control
or affect the meaning, construction or effect of this instrument. Whenever the
singular number is used herein, the same shall include the plural; and the
neuter, masculine and feminine genders shall include each other, as applicable.
This instrument may be executed in any number of counterparts each of which
shall be deemed an original.
SECTION 9. APPLICABLE LAW. This Agreement and Declaration of Trust is
created under and is to be governed by and construed and administered according
to the laws of The Commonwealth of Massachusetts. 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 10. Provisions in Conflict with Law or Regulations.
(a) The provisions of the Declaration of Trust are severable, and if
the Trustees shall determine, with the advice of counsel, that any of such
provisions is in conflict with the 1940 Act, the regulated investment
company provisions of the Internal Revenue Code or with other applicable
laws and regulations, the conflicting provision shall be deemed never to
have constituted a part of the Declaration of Trust; provided, however,
that such determination shall not affect any of the remaining provisions of
the Declaration of Trust or render invalid or improper any action taken or
omitted prior to such determination.
(b) If any provision of the Declaration of Trust shall be held invalid
or unenforceable in any jurisdiction, such invalidity or unenforceability
shall attach only to such provision in such jurisdiction and shall not in
any manner affect such provision in any other jurisdiction or any other
provision of the Declaration of Trust in any jurisdiction.
SECTION 11. EVIDENCE OF AMENDMENT. This Declaration of Trust may be
restated and/or amended at any time and shall be so evidenced by an instrument
in writing signed by a majority of the then Trustees.
SECTION 12. TRUST ONLY. It is the intention of the Trustees to create only
the relationship of Trustee and beneficiary between the Trustees and each
Shareholder from time to time. It is not the intention of the Trustees to create
a general partnership, limited partnership, joint stock association,
corporation, bailment, or any form of legal relationship other than a trust.
Nothing in this Agreement and Declaration of Trust shall be construed to make
the Shareholders, either by themselves or with the Trustees, partners or members
of a joint stock association.
SECTION 13. USE OF THE NAME "FRANKLIN." Franklin Advisers, Inc., as the
proposed Manager of the Trust's assets, has consented to the use by the Trust of
the identifying word "Franklin" as part of the name of the Trust and in the name
of any Series of Shares. Such consent is conditioned upon the employment of the
Manager, or an affiliate of said Company, as Manager of the Trust and said
Series. The name or identifying words "Franklin" or any variation thereof may be
used from time to time in other connections and for other purposes by the
Manager or affiliated entities. The Manager has the right to require the Trust
to cease using "Franklin" in the name of the Trust and in the names of its
Series if the Trust and said Series cease to employ, for any reason, the
Manager, or an affiliate of said Company, as the Manager or adviser of the Trust
or such Series. Future names adopted by the Trust for itself and its Series
shall be the property of the Manager and its affiliates, and the use of such
names shall be subject to the same conditions set forth in this Section insofar
as such name or identifying words require the consent of the Manager.
IN WITNESS WHEREOF, the Trustees hereby set their hands as of the 13th day
1988.
/s/ Xxxxx X. Xxxxxx, III /s/ Xxxxxx X. Xxxxxx
Xxxxx X. Xxxxxx, III Xxxxxx X. Xxxxxx
/s/ Xxxxx X. Xxxxx /s/ Xxxxx X. Xxxxxxxxxx
Xxxxx X. Xxxxx Xxxxx X. Xxxxxxxxxx
/s/ Xxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxx Xxxxx X. Xxxxxxxx
/s/ Xxxxxxx X. Xxxxxxx /s/ Xxxxxx X. Xxxxxxx, Xx.
Xxxxxxx X. Xxxxxxx Xxxxxx X. Xxxxxxx, Xx.
/s/ Xxxxx X. X. XxXxxx
Xxxxx X. X. XxXxxx
