SUB-ITEM 77Q1(a): New Fund Agreement
ELFUN DIVERSIFIED FUND
FUND AGREEMENT
This Amended and Restated Agreement of Elfun Diversified Fund (the "Fund")
is made as of the 1st day of July, 2016 (the "Agreement").
WHEREAS, the Fund was established as a Connecticut common law trust to serve
as a vehicle for investment exclusively by certain eligible persons that
include (1) regular and senior members of the Elfun Society, (2) their
immediate family members and trusts established for the exclusive benefit of
these members, (3) the surviving spouse of a deceased Elfun Society member,
(4) General Electric Company, its subsidiary and controlled companies, and
(5) any other persons and entities approved by the trustees of the Fund (the
"Trustees") from time to time (collectively, the "Eligible Participants"), in
accordance with the Fund's operation as an "employees' securities company," as
defined in Section 2(a)(13) of the Investment Company Act of 1940, as amended
(the "Investment Company Act"); and
WHEREAS, the persons listed below as signatories to this Agreement have
agreed to act as Trustees; and
WHEREAS, the Fund is registered as an open-end investment management company
pursuant to Section 8(a) of the Investment Company Act but has obtained an
order of the Securities and Exchange Commission ("SEC" or "Commission") issued
pursuant to Section 6(b) of the Investment Company Act granting it special
relief from the following provisions of this Act in connection with its
operation as an "employees' securities company": Sections 10(a), 13(a)(4),
15(a), 15(c), 16(a), 30(d) and 32(a) of this Act (the "Special Relief"); and
WHEREAS, the Trustees have determined to convert the Fund from its status as
an "employees' securities company" operating pursuant to the Special Relief
that accepts investments only from Eligible Participants, to the status of an
open-end investment management company operating without this Special Relief
that would permit investments by the public at large; and
WHEREAS, it is desirable that the uses and purposes applicable to the Fund
in connection with its revised status as an open-end management investment
company operating without the Special Relief, as well as the powers and duties
of the Trustees and the rights, interests and privileges of the beneficiaries
of the Fund be set forth herein;
NOW, THEREFORE, it is agreed that the provisions, terms and conditions
governing the Fund shall be as follows:
1. Name. The Fund shall be known as the ELFUN DIVERSIFIED FUND.
1
2. Purpose. The purpose of the Fund shall be: (1) to issue units (the "Units")
evidencing ownership interests in the Fund; (ii) to receive, hold, invest,
reinvest and disburse the monies received from investor in the Fund (the
"Unitholders") upon the purchase of the Units; (iii) to receive, hold, invest,
reinvest and distribute the net income and net capital gains, if any, realized
by the Fund in the course of ownership of its assets; and (iv) to redeem and
transfer Units.
3. Powers of Trustees. Subject to those policies of the Fund as may be adopted
and be in effect from time to time, the Trustees shall invest and reinvest, to
the extent they deem proper, the Fund's assets, together with any increment
thereto or income derived therefrom, in securities and other permitted
instruments and assets. Except as otherwise specified in this Paragraph 3, the
Trustees shall not in any respect be limited in their powers of investment.
Without limiting the generality of the foregoing in any manner, the Trustees
are expressly authorized and empowered, in their absolute discretion:
(a) to retain in cash and keep unproductive of income such portion of the
Fund's assets as they may deem advisable;
(b) to sell, exchange, convey, transfer, or dispose of, and also to loan or
grant options with respect to, any property or cash at any time held by
them, and to make any sale or other disposition by contract, by public
auction or otherwise, for cash, property or upon credit, or partly for cash
or property and partly upon credit, as they may deem best, and no person
dealing with the Trustees shall be bound to see to the application of the
proceeds thereof or to inquire into the validity, expediency or propriety of
any such sale or disposition;
(c) to compromise, compound, and settle any debt, claim or obligation due to
or from them as Trustees hereunder and to reduce or change the rate of
interest thereon, to extend or otherwise modify, or to foreclose upon
default or otherwise enforce, any such debt, claim or obligation;
(d) to vote themselves, or by proxy, any securities with voting rights held
by them; to exercise any options appurtenant to any other securities for the
conversion thereof into other securities, or to exercise or sell any rights
or warrants to subscribe for additional securities, and to make any and all
necessary payments therefor; to join in or to dissent from and to support or
oppose the reorganization, recapitalization, consolidation, liquidation,
sale or merger of corporations, or other entities or properties in which
they may be interested as Trustees, and to accept and hold any such
securities which may be issued in connection therewith, all upon such terms
and conditions as they may deem advisable;
(e) to make, execute, acknowledge, and deliver any and all necessary papers,
documents, agreements and instruments for the implementation of the powers
herein enumerated;
(f) to enforce any right, obligation or claim and in general to protect in
any way the interests of the Fund, either before or after default, and where
they shall consider such action for the best interests of the Fund, to
abstain from the enforcement of any right, obligation, or claim and to
abandon any property which at any time may be held by them or in which they
may have an interest;
2
(g) to borrow or raise money for the purposes of the Fund, upon such terms
and conditions as the Trustees may deem desirable or proper, and for any sum
so borrowed, to issue their promissory notes as Trustees to secure the
repayment thereof by pledging all or any part of the Fund's assets; and no
person lending money to the Trustees shall be bound to see to the
application of the money lent or to inquire into the validity, expediency,
or propriety of any such borrowing;
(h) to receive, purchase, hold, apportion, sell, distribute, and otherwise
acquire and dispose of securities, cash and other assets;
(i) to collect, receive, invest, apportion, and distribute, any and all
income of the Fund;
(j) to cause any securities or other assets from time to time held by them
to be registered in, or transferred into, the name of the Fund or into their
name as Trustees, or the name of their nominee or nominees, or to retain
them unregistered or in form permitting transfer by delivery, but the books
and records of the Trustees shall at all times show that all such securities
or other assets are part of the Fund;
(k) to do all such acts, take all such proceedings, and exercise all such
rights and privileges, although not hereinbefore specifically mentioned,
with relation to the assets of the Fund as if they were the absolute owners
thereof, which they may deem necessary or proper for the best interests of
the Fund.
Any document necessary or appropriate to effectuate or implement any act or
agreement of the Trustees or any such Trustee or committee of Trustees may
be executed by any Trustee and when so executed such document shall
constitute a valid, binding and enforceable act or agreement of the Trustees
and the Fund. Without further inquiry as to the authority of a Trustee to
bind the Fund, persons or entities may rely upon the execution of any
document by any Trustee as constituting the valid, binding and enforceable
act or agreement of the Trustees and the Fund.
4. Authority to Employ Others. The Trustees may use, employ, appoint,
discharge and consult such individuals, corporations or other entities as
agents, employees or otherwise (including legal counsel) as they may deem
necessary or advisable to carry out their functions under this Agreement and
may pay such persons or entities such compensation, including expenses, as
they may deem appropriate and charge the same against the Fund's assets. The
Trustees may adopt such rules, regulations, directions or orders as in their
discretion they deem appropriate for the guidance of their agents and
employees and may delegate all or so much of their powers and authority to
such agents and employees as they may deem necessary or advisable, subject,
however, to any mandatory limitations imposed upon such delegation by
applicable law. Any actions taken by their agents and employees in
conformity with such rules, regulations, directions, advice, orders or
delegations by the Trustees shall be deemed to be the proper and bindings
acts of the Trustees.
3
5. Custodian. Without limiting the powers set forth in Paragraph 4 above,
the Trustees shall have the power to appoint and discharge from time to
time, as custodian or custodians, one or more banks or trust companies to
hold in custody all property, securities, money and other assets of the Fund
and perform such other administrative services for the Fund as the Trustees
may direct (individually, a "Custodian" and collectively, the "Custodians").
The Trustees may authorize the Custodian or Custodians to deposit or arrange
for the deposit of securities constituting all or a portion of the Fund's
assets in a "clearing corporation" as defined in Article VIII of the Uniform
Commercial Code. All or any part of the securities or other nominative items
constituting the Fund may be transferred to, and held in the name of, the
Custodian or Custodians, in the name of a nominee or nominees selected by it
or them, or in the name of the registered holder thereof at the time of
deposit with, or receipt by, the Custodian or Custodians of such securities
endorsed in blank for transfer or accompanied by proper instruments of
assignment in blank duly executed by such nominee or nominees or registered
holder.
6. Investment Adviser. Without limiting the powers set forth in Paragraph 4
above, the Trustees shall have the power to appoint and discharge from time
to time one or more investment advisers (individually, an "Adviser" and
collectively, the "Advisers"). Such Adviser or Advisers may be authorized by
the Trustees to supervise the investment operations of the Fund and the
composition of its portfolio, and may also be authorized to furnish the Fund
with advice and recommendations concerning investments, investment policies,
and the purchase or sale of securities as well as advice concerning
appropriate persons to fill positions with the Fund. In connection with the
performance of the foregoing duties, the Adviser or Advisers may be further
authorized to carry out and execute purchases and sales of investments and
to perform such other acts as the Trustees may deem necessary or advisable.
7. Unitholder Servicing Agent. Without limiting the powers set forth in
Paragraph 4 above, the Trustees shall have the power to appoint and
discharge from time to time one or more persons or entities to act as
unitholder servicing agent or agents (individually, an "Agent" and
collectively, the "Agents") with respect to the Units issued from time to
time under this Agreement. Such Agent or Agents may be authorized to provide
the Fund with services in connection with (i) the issuance, transfer,
cancellation and redemption of Units; (ii) the making of all payments and
distributions to Unitholders in connection with Units; (iii) the performance
of any and all functions referred to in this Agreement as being performed by
the Agent or Agents; and (iv) the performance of such other administrative
services for the Fund as the Trustees may direct.
8. Number and Election of Trustees. The number of Trustees of the Fund shall
be twelve, it being understood that such number may hereafter be changed at
any time and from time to time; provided, however, that there shall always
be at least one Trustee. When a quorum is present at a meeting, a majority
of the Units voted shall decide any question and a plurality shall elect a
Trustee, except when a different vote is specifically required by any
provision herein or the Bylaws, if any, or any applicable law. From time to
time, the Trustees may fill vacancies in the Trustees.
4
Any Trustee may at any time resign as a trustee of the Fund by giving
written notice thereof to the other Trustees. Any Trustee may be removed at
any time as a trustee of the Fund by the affirmative vote of two-thirds of
the Trustees then in office. The Trustees shall hold office until their
resignation, removal, death or the appointment of their successor.
The Trustees may appoint from among them a Chairman and one or more Vice
Chairmen. The Chairman and Vice Chairmen shall have such powers and duties
with respect to the calling and conducting of meetings of Trustees as the
Trustees may direct. The Trustees may appoint from time to time a Chief
Executive Officer or President, a Secretary, and Assistant Secretary and
such other Fund officers as they may deem necessary or advisable, and the
Trustees may delegate to these persons, subject to the mandatory
requirements of applicable law, such powers and duties as they deem
appropriate. The Trustees may also adopt from time to time such rules and
regulations for the organization and transaction of the Fund's business as
they deem necessary or advisable.
The Trustees may act either by meetings or by written consent. In the
case of meetings, a majority of the Trustees shall constitute a quorum for
the conduct of business, and the vote of a majority of the Trustees present
at a meeting at which a quorum is present shall be the act and deed of the
Trustees. In the case of action by written consent, it shall be sufficient
to bind all the Trustees, and shall be deemed their act and deed, if written
consents are obtained from a majority of the Trustees, provided, however,
that the written consents are filed with the minutes of the Trustees'
meetings and reported at the next meeting of the Trustees. Meetings of the
Trustees may be held either in person or by telephone or other means which
permit the Trustees to confer with one another. The manner, time and place
of holding meetings, the notices thereof, and the length of time required
for such notices shall be determined by the Trustees. Waivers of notice,
either before, at or after a meeting, shall be permitted.
9. Compensation and Expenses of Trustees. The Trustees may receive
compensation for the services they perform for the Fund in an amount to be
determined by the Trustees; provided, however, that any change in
compensation previously reported to Unitholders as being paid to the
Trustees shall be reported in the shareholder report next published and
distributed to Unitholders after this change. Compensation of the Trustees
as provided herein, as well as the compensation of any agent, employee or
counsel of the Trustees and the expenses of administering the Fund shall be
paid from the assets of the Fund.
10. Fiduciary Duties. Each Trustee shall discharge his duties with respect
to the Fund solely in the interest of the Unitholders and with the care,
skill, prudence and diligence under the circumstances then prevailing that a
prudent person acting in a like capacity and familiar with such matters
would use in the conduct of an enterprise of like character and with similar
aims.
11. Statements of Account. The Agent will deliver to each Unitholder a
statement of account (the "Statement of Account") showing the number of
Units to which they are
5
entitled by reason of payments made by them or for their account, including
the reinvestment of income and gains, if any.
Units shall be issued to Unitholders in consideration of investments made
in the Fund on the basis of the Units' Net Asset Value, as determined in the
manner provided below in Paragraph 13.
Each Unit shall be equal to every other Unit, without preference or
priority of any one Unit over another. Unitholders shall have no voting
rights hereunder except with respect to amendments to this Agreement, as
described in Paragraph 20 below, and as required by applicable law. Each
Unit entitles the holder to one vote. The Units do not confer preemptive,
subscription or conversion rights to Unitholders.
The Trustees are authorized and empowered in their discretion, at any
time and from time to time, to authorize Unit splits or reverse splits,
provided, however, that the proportionate interest of each Unitholder shall
not in any way be adversely affected thereby. In the event the number of
Units is increased, the Trustees shall issue to each Unitholder, without
further payment, a Statement of Account showing the additional Units to
which the Unitholder shall be entitled, such additional Units to be in the
same proportion to the number of Units held by the Unitholder prior to such
issuance as the total number of additional Units to be issued is to the
total number of Units outstanding prior to such issuance. In the event that
the number of Units shall be reduced, the Trustees shall issue a Statement
of Account showing such reduction, and the Trustees may do all things
necessary or expedient to make such reduction effective.
12. Death of a Unitholder. The death of a Unitholder during the continuance
of the Fund shall not operate to terminate the Fund, nor shall it entitle
the personal representative of any such deceased Unitholder to an accounting
or to take any action in the courts or otherwise against the Fund or the
Trustees; provided, however, the right of redemption provided for in
Paragraph 14 below shall not expire with the death of the Unitholder, but
such right may be exercised by the personal representatives, legatees,
distributees, or beneficiaries in the manner provided in Paragraph 14.
13. Valuation of Units. The net asset value (the "Net Asset Value") of the
Units shall be determined by the Trustees or their designees each day that
the New York Stock Exchange is open, as of the close of trading on the
Exchange, New York City time, under policies and procedures as may be
approved from time to time by the Trustees. Such value when so determined
shall be taken as the value thereof for all purposes of this Agreement and
shall be binding and final upon the Unitholders, their personal
representatives, heirs, legatees, distributees, and beneficiaries.
14. Redemption of Units. Unitholders may redeem Units either in whole or in
part by delivering a redemption form, duly executed and in form satisfactory
to the Trustees, to the Agent or as the Trustees may otherwise direct, or in
such other manner as the Trustees may provide that is consistent with
applicable law. Redemptions shall be made at the Net Asset Value next
computed after such delivery (or other acceptable tender) less
6
such redemption fee (not, however, to exceed one percent) as the Trustees
may from time to time prescribe.
The Trustees may suspend a Unitholder's right of redemption or postpone
the date of payment when (a) trading in the markets the Fund normally
utilizes is restricted or an emergency exists as determined by the
Commission so that disposal of the Fund's investments or determination of
its Net Asset Value is not reasonably practicable, or (b) the Commission, by
order, has otherwise provided for or permitted such suspension or
postponement.
15. Payment in Cash. Any payment made to Unitholders pursuant to the
provisions of this Agreement shall be made in cash.
16. Distributions. The Trustees may in their discretion, to the extent
consistent with applicable tax or other law and the stated objective and
policies of the Fund, at any time or times distribute income, capital gains
or principal to the Unitholders in such amounts as the Trustees may
determine. Each such distribution shall be made in the proportion which the
number of Units held by each Unitholder bears to the total number of Units
issued and outstanding at the time of such distribution.
17. Audit. As soon as practicable after the end of each calendar year, the
Trustees shall cause an audit to be made of the accounts, transactions,
securities and property of the Fund, such audit to be made by a firm of
certified or chartered accountants of recognized standing selected by the
Trustees. A certified copy of each such audit report shall be filed with the
Trustees. Such audit report shall show the Net Asset Value of Units
outstanding as of the 31st day of December of such calendar year and shall
show other matters as the Trustee may require and to the extent consistent
with applicable law.
18. Taxes. All taxes that may be required to be paid in respect of the issue
and/or transfer of Units shall be paid by the Unitholders to whom the Units
are issued.
19. Termination by Trustees. The Trustees may, in their discretion,
determine to terminate the Fund in whole or in part. In any such case, the
Trustees shall redeem outstanding Units at Net Asset Value, which shall be
determined as of a date fixed by the Trustees and specified in the notice of
termination delivered to Unitholders.
20. Amendments. The Trustees shall have the power to amend this Agreement,
but no amendment shall be made which shall affect the Unitholders' right of
redemption or other substantial rights of the Unitholders unless and until a
copy of such proposed amendment shall have been submitted by mail to the
Unitholders and the same shall have been approved by the favorable vote of
more than 50% of the outstanding Units or, if less, 67% of the Units
represented at a meeting if the holders of more than 50% of the outstanding
Units are present and represented by proxy.
21. Situs and Choice of Law. The situs of the Fund and the place of its
administration shall be in the State of Connecticut and, after July 1, 2016,
in the Commonwealth of Massachusetts. All questions concerning the validity,
construction and effect of this Agreement and of the Fund hereunder, and the
rights of any person
7
having an interest hereunder, shall be determined exclusively according to
the laws of the State of Connecticut.
8
IN WITNESS WHEREOF, the Trustees have executed this Agreement as of the date
first written above to evidence their acceptance of the duties of the Trustees
under and pursuant to the foregoing terms and conditions.
/s/ Xxxxxxx X. Xxxxx
------------------------------
Xxxxxxx X. Xxxxx
/s/ Xxxxxxx X. Xxxxx
------------------------------
Xxxxxxx X. Xxxxx
/s/ Xxxxxxx X. Xxxxxxxx
------------------------------
Xxxxxxx X. Xxxxxxxx
/s/ Xxxx X. Xxxxxx
------------------------------
Xxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxxxxxx
------------------------------
Xxxxxxx X. Xxxxxxxx
/s/ Xxxxxx X. Xx Xxxxx
------------------------------
Xxxxxx X. Xx Xxxxx
[Signature Page to Elfun Diversified Fund Agreement]
