EXHIBIT (a)
AGREEMENT AND DECLARATION OF TRUST
OF
LAUDUS INSTITUTIONAL TRUST
(F/K/A XXXX XXXXXXXXX VARIABLE TRUST)
(F/K/A LAUDUS VARIABLE INSURANCE TRUST)
WHEREAS, THIS AGREEMENT AND DECLARATION OF TRUST is made and entered into
as of the date set forth below by the Trustees named hereunder for the purpose
of forming a Delaware statutory trust in accordance with the provisions
hereinafter set forth, to be effective upon the filing of the executed
Certificate of Trust with the state of Delaware.
NOW, THEREFORE, the Trustees hereby direct that a Certificate of Trust be
filed with the Office of the Secretary of State of the State of Delaware and do
hereby declare that the Trustees will hold IN TRUST all cash, securities and
other assets which the Trust now possesses or may hereafter acquire from time to
time in any manner and manage and dispose of the same upon the following terms
and conditions for the pro rata benefit of the holders of Shares of this Trust.
ARTICLE I
NAMES AND DEFINITIONS
Section 1. Name. This trust shall be known as "LAUDUS INSTITUTIONAL 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) The "1940 Act" refers to the Investment Company Act of 1940 and
the Rules and Regulations thereunder, all as amended from time to time;
(b) "By-Laws" shall mean the By-Laws of the Trust as amended from
time to time which By-Laws are expressly herein incorporated by reference as
part of the "governing instrument" within the meaning of the Delaware Act
(defined herein);
(c) "Class" means a class of Shares in a Series of the Trust
established in accordance with the provisions of Article III hereof.
(d) The terms "Commission" and "Principal Underwriter" shall have
the respective meanings given them in Section 2(a)(7) and Section 2(a)(29) of
the 1940 Act;
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(e) "Declaration of Trust" shall mean this Agreement and
Declaration of Trust, as amended or restated from time to time;
(f) "Delaware Act" means the Delaware Business Trust Act, 12
Del. Code, Section 3801 et seq., as amended from time to time;
(g) The term "Interested Person" has the meaning given it in
Section 2(a)(19) of the 1940 Act;
(h) "Investment Manager" or "Manager" means a party furnishing
services to the Trust pursuant to any contract described in Article IV, Section
7(a) hereof;
(i) "Person" means and includes individuals, corporations,
partnerships, trusts, associations, joint ventures, estates and other entities,
whether or not legal entities, and governments and agencies and political
subdivisions thereof, whether domestic or foreign;
(j) "Series" refers to each Series of Shares established and
designated under or in accordance with the provisions of Article III and shall
mean an entity such as that described in Section 18(f)(2) of the 1940 Act, and
subject to Rule 18f-2 thereunder:
(k) "Shareholder" means a record owner of outstanding Shares;
(l) "Shares" means the shares of beneficial interest into which the
beneficial interest in the Trust shall be divided from time to time and includes
fractions of Shares as well as whole Shares;
(m) The "Trust" refers to the Delaware statutory trust established
under the Delaware Act by this Agreement and Declaration of Trust and the filing
of the Certificate of Trust in the Office of the Secretary of State of the State
of Delaware, as it may be amended from time to time;
(n) "Trustees" refer 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;
(o) 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 any Series or by the Trustees on behalf of the Trust or any
Series.
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ARTICLE II
PURPOSE OF THE TRUST
The purpose of the Trust is to conduct, operate and carry on the business
of a management investment company registered under the 1940 Act through one or
more Series investing primarily in securities (including options), debt
instruments, money market instruments, commodities, commodity contracts and
options thereon and other instruments and rights of a financial character.
ARTICLE III
SHARES
Section 1. Division of Beneficial Interest. The beneficial interest in the
Trust shall be divided into one or more Series. Each Series may be divided into
two or more Classes. Subject to the further provisions of this Article III and
any applicable requirements of the 1940 Act, the Trustees shall have full power
and authority, in their sole discretion, and without obtaining any authorization
or vote of the Shareholders of any Series or Class thereof, (i) to divide the
beneficial interest in each Series or Class thereof into Shares, with or without
par value, as the Trustees shall determine, (ii) to issue Shares without
limitation as to number (including fractional Shares), to such Persons and for
such amount and type of consideration, subject to any restriction set forth in
the By-Laws, including cash or securities, at such time or times and on such
terms as the Trustees may deem appropriate, (iii) to establish and designate and
to change in any manner any Series or Class thereof and to fix such preferences,
voting powers, rights, duties and privileges and business purpose of each Series
or Class thereof as the Trustees may from time to time determine, which
preferences, voting powers, rights, duties and privileges may be senior or
subordinate to (or in the case of business purpose, different from) any existing
Series or Class thereof and may be limited to specified property or obligations
of the Trust or profits and losses associated with specified property or
obligations of the Trust, (iv) to divide or combine the Shares or any Series or
Class thereof into a greater or lesser number without thereby materially
changing the proportionate beneficial interest of the Shares of such Series or
Class in the assets held with respect to that Series or Class, (v) to classify
or reclassify any issued Shares of any Series or Class thereof into shares of
one or more Series or Classes thereof, and (vi) to take such other action with
respect to the Shares as the Trustees may deem desirable.
Subject to the distinctions permitted among Classes of the same Series as
established by the Trustees consistent with the requirements of the 1940 Act,
each Share of a Series of the Trust shall represent an equal beneficial interest
in the net assets of such Series, and each holder of Shares of a Series shall be
entitled to receive such holder's pro rata share of distributions of income and
capital gains, if any, made with respect to such Series. Upon redemption of the
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Shares of any Series, the applicable Shareholder shall be paid solely out of the
funds and property of such Series of the Trust.
All references to Shares in this Declaration of Trust shall be deemed to
be Shares of any or all Series or Classes thereof, as the context may require.
All provisions herein relating to the Trust shall apply equally to each Series
of the Trust and each Class thereof, except as the context otherwise requires.
All Shares issued hereunder, including, without limitation, Shares issued
in connection with a dividend paid in Shares or a split or reverse split of
Shares, shall be fully paid and non-assessable. Except as otherwise provided by
the Trustees, Shareholders shall have no preemptive or other right to subscribe
to any additional Shares or other securities issued by the Trust.
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 (or Class).
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 issuance of Share
certificates, transfer of Shares of each Series (or Class) 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 the identity of the
Shareholders of each Series (or Class) and as to the number of Shares of each
Series (or Class) held from time to time by each.
Section 3. Transfer of Shares. Except as otherwise provided by the
Trustees, Shares shall be transferable on the books of the Trust only by the
record holder thereof or by his duly authorized agent upon delivery to the
Trustees or the Trust's transfer agent of a duly executed instrument of
transfer, together with a Share certificate if one is outstanding, and such
evidence of the genuineness of each such execution and authorization and of such
other matters as may be required by the Trustees. Upon such delivery, and
subject to any further requirements specified by the Trustees or contained in
the By-Laws, the transfer shall be recorded on the books of the Trust. Until a
transfer is so recorded, the Shareholder of record of Shares shall be deemed to
be the holder of such Shares for all purposes hereunder and neither the Trustees
nor the Trust, nor any transfer agent or registrar or any officer, employee or
agent of the Trust, shall be affected by any notice of any proposed transfer.
Section 4. Investments in the Trust. Investments may be accepted by the
Trust from such Persons, at such times, on such terms, and for such
consideration as the Trustees from time to time may authorize. Each investment
shall be credited to the individual Shareholder's account in the form of full
and fractional Shares of the Trust, in such Series (or Class) as the purchaser
shall select, at the net asset value per Share next determined for such Series
(or Class) after receipt of the investment; provided, however, that the Trustees
may, in their sole discretion, impose a sales charge or transaction fee upon
investments in the Trust.
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Section 5. 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, incapacity, dissolution, termination or
bankruptcy 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 such 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 Shareholder, nor, except as
specifically provided herein, to call upon any Shareholder for the payment of
any sum of money or assessment whatsoever other than such as the Shareholder may
at any time personally agree to pay.
Section 6. Power of Board of Trustees to Change Provisions Relating to
Shares. Notwithstanding any other provisions 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 federal or state law.
Subject to the foregoing Paragraph, the Board of Trustees may amend the
Declaration of Trust to amend any of the provisions set forth in paragraphs (a)
through (i) of Section 7 of this Article III.
Section 7. Establishment and Designation of Shares. The establishment and
designation of any Series (or Class) of Shares shall be effective upon the
resolution by a majority of the then Trustees, adopting a resolution which sets
forth such establishment and designation and the relative rights and preferences
of such Series (or Class) whether directly in such resolution or by reference to
another document including, without limitation, any registration statement of
the Trust, or as otherwise provided in such resolution. Each such resolution
shall be incorporated herein by reference upon adoption.
Shares of each Series (or Class) established pursuant to this Section 7,
unless otherwise provided in the resolution establishing such Series (or Class),
shall have the following relative rights and preferences:
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(a) Assets Held with Respect to a Particular Series. All
consideration received by the Trust for the issue of Shares 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 any
reinvestment of such proceeds in whatever form the same may be, shall
irrevocably be held with respect 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 any reinvestment of such proceeds, in whatever form the
same may be, are herein referred to as "assets held with respect 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 assets
held with respect 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 the Trustees, in their sole
discretion, deem fair and equitable, and any General Assets as allocated to a
particular Series shall be held with respect to that Series. Each such
allocation by the Trustees shall be conclusive and binding upon the Shareholders
of all Series for all purposes. Separate and distinct records shall be
maintained for each Series and the assets held with respect to each Series shall
be held and accounted for separately from the assets held with respect to all
other Series and General Assets of the Trust not allocated to such Series.
(b) Liabilities Held with Respect to a Particular Series. The assets
of the Trust held with respect to each particular Series shall be charged
against the liabilities of the Trust held with 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 being
held with respect 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 held with respect 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.
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, and shall be required by contract to look,
exclusively to the assets of that particular Series for payment of such credit,
claim, or contract. In the absence of an express contractual agreement so
limiting the claims of such creditors, claimants and contract providers, each
creditor, claimant and contract provider will be deemed nevertheless to have
impliedly agreed to such limitation unless an express provision to the contrary
has been incorporated in the written contract or other document establishing the
claimant relationship.
(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 paid on or in
respect to any Series (or Class), nor any redemption or
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repurchase of the Shares of any Series (or Class), shall be effected by the
Trust other than from the assets held with respect to such Series, nor, except
as specifically provided in Section 8 of this Article III, shall any Shareholder
of any particular Series, otherwise have any right or claim against the assets
held with respect 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. 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 (or Class) shall have the right to approve or
disapprove matters affecting the Trust and each respective Series (or Class) as
if the Series (or Classes) 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 dollar-weighted basis, i.e., voting shall
be based on the relative net asset value of each Series (or each Class within a
Series). 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 on the same dollar-weighted
basis.
(e) Equality. All the Shares of each particular Series shall
represent an equal proportionate undivided interest in the assets held with
respect to that Series (subject to the liabilities held with respect 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 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 held with
respect to any two or more Series into assets and liabilities held with respect
to a single Series.
(i) Elimination of Series. At any time there are no Shares
outstanding of any particular Series (or Class) previously established and
designated, the Trustees may by resolution
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of a majority of the then Trustees abolish that Series (or Class) and rescind
the establishment and designation thereof.
Section 8. Indemnification of Shareholders. If any Shareholder or former
Shareholder shall be exposed to liability by reason of a claim or demand
relating to his or her being or having been a Shareholder, and not because of
his or her acts or omissions, 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 to be held harmless from and indemnified out of the assets of
the Trust against all loss and expense arising from such claim or demand, but
only out of the assets held with respect to the particular Series or Class of
which such Person is or was a Shareholder and from or in relation to which such
liability arose.
ARTICLE IV
THE BOARD OF TRUSTEES
Section 1. Number, Election and Tenure. The number of Trustees
constituting the Board of Trustees shall initially be four. Hereafter, the
number 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 one (1) nor more than fifteen. 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. Subject to
any policy adopted by the Board of Trustees, each Independent Trustee shall
retire no later than December 31st of the year during which he or she reaches
seventy-two years of age, or, if sooner, until he or she dies, resigns, is
declared bankrupt or incompetent by a court or appropriate jurisdiction, or is
removed, or until the next meeting of Shareholders called for the purpose of
electing Trustees and until the election and qualification of his or her
successor. In the event that less than a majority of the Trustees holding office
have been elected by the Shareholders, the Trustees then in office shall call a
Shareholders' meeting for the election of Trustees. Any Trustee may resign at
any time by written instrument signed by him or her 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 or expense reimbursement for any period following his or her
resignation or removal, or any right to damages on account of such removal. The
Shareholders may elect Trustees at any meeting of Shareholders called by the
Trustees for that purpose. A meeting of Shareholders for the purpose of electing
or removing one or more Trustees may be called (i) by the Trustees upon their
own vote, or (ii) upon the demand of shareholders owning 10% or more of the
Shares of the Trust in the aggregate.
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
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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.
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. The Trustees shall have full power and authority
to do any and all acts and to make and execute any and all contracts and
instruments that they may consider necessary or appropriate in connection with
the administration of the Trust. Without limiting the foregoing, the Trustees
may: (i) 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; (ii) elect and remove, with or without cause, such officers and
appoint and terminate such agents as they consider appropriate; (iii) 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; (iv) 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;
(v) provide for the issuance and distribution of Shares by the Trust directly or
through one or more Principal Underwriters or for the determination of
Shareholders with respect to various matters; (vi) declare and pay dividends and
distributions to Shareholders of each Series from the assets of such Series;
(vii) establish from time to time, in accordance with the provisions of Article
III, hereof, any Series (or Class) of Shares, each such Series (or Class) to
operate as a separate and distinct investment medium and with separately defined
investment objectives and policies and distinct investment purpose; and (viii)
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. Unless otherwise specified herein or in the
By-Laws or required by law, any action by the Board of Trustees shall be deemed
effective if approved or taken by a majority of the Trustees present at a
meeting of Trustees at which a quorum of Trustees is present, within or without
the State of Delaware. Any action required or permitted to be taken at any
meeting of the Board of Trustees, or any committee thereof, may be taken without
a meeting if a majority of the Trustees or committee (as the case may be) (or
such larger proportion thereof as shall be required by any express provision of
this Declaration of Trust or the By-Laws)
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consent thereto in writing, and the writing or writings are filed with the
minutes of the proceedings of the Board of Trustees, or committee.
Without limiting the foregoing, the Trustees shall have the power and
authority to cause the Trust (or to act on behalf of the Trust):
(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, debentures, stocks,
preferred 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 by any bank or savings institution, or by any
corporation or organization organized under the laws of the United States or of
any state, territory, or possession thereof, or by any corporation or
organization organized under any foreign law, or in "when issued" contracts for
any such securities, 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 or any Series, subject to any
requirements of the 1940 Act;
(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
that it is Trust Property, 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 or to authorize the
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custodian or a subcustodian or a nominee or nominees to deposit the same in a
securities depository;
(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 trust or otherwise, and in that connection to
deposit any security with, or transfer any security to, any such committee,
depositary or voting trust, 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 voting trust 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;
(l) To purchase and pay for entirely out of Trust Property
such insurance as the Trustees 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 Managers, Principal Underwriters, or
independent contractors of the Trust, individually against all claims and
liabilities of every nature arising by reason of holding Shares, 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 Manager, Principal Underwriter, or independent contractor,
including any action taken or omitted that may be determined to constitute
negligence, whether or not the Trust would have the power to indemnify such
Person against liability;
(m) 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
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providing such retirement and other benefits, for any or all of the Trustees,
officers, employees and agents of the Trust;
(n) To employ one or more banks, trust companies or companies
that are members of a national securities exchange or such other entities as
the Commission may permit as custodians of any assets of the Trust subject to
any conditions set forth in this Declaration or Trust or in the By-Laws;
(o) To interpret the investment policies, practices or
limitations of any Series or Class;
(p) To invest part or all of the Trust Property (or part or
all of the assets of any Series), or to dispose of part or all of the Trust
Property (or part or all of the assets of any Series) and invest the proceeds
of such disposition, in securities issued by one or more other investment
companies registered under the 1940 Act (including investment by means of
transfer of part or all of the Trust Property in exchange for an interest or
interests in such one or more investment companies) all without any requirement
of approval by Shareholders unless required by the 1940 Act. Any such other
investment company may (but need not) be a trust (formed under the laws of the
State of Delaware or of any other state) which is classified as a partnership
for federal income tax purposes; and
(q) To engage in any other lawful act or activity in
which corporations organized as Delaware statutory trusts may engage.
The Trust shall not be limited to investing in obligations maturing
before the possible termination of the Trust or one or more of its Series. The
Trust shall not in any way be bound or limited by any present or future law or
custom in regard to investment by fiduciaries. The Trust 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 any Series (or Class), or partly out of the principal and partly out of
the income, and to charge or allocate the same to, between or among such one or
more of the Series (or Classes) that may be established or designated pursuant
to Article III, as they deem fair, all expenses, fees, charges, taxes and
liabilities incurred or arising in connection with the Trust or Series (or
Class), 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 Manager, Principal Underwriter,
auditors, counsel, custodian, transfer agent, 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
12
particular series, to pay directly, in advance or arrears, for charges of the
Trust's custodian or transfer agent, 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 Trust, 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 or she 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 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 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 Classes) 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 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.
13
(d) The Trustees are further empowered, at any time and from
time to time, to contract with any entity to provide 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 or
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 7(d), Shareholders shall have power to vote only (i) for the election or
removal of Trustees as provided in Article IV, Section 1, and (ii) with respect
to such additional matters relating to the Trust as may be required by this
Declaration of Trust, the By-Laws, the 1940 Act or any registration statement of
the Trust filed 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 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.
14
To the extent that the 1940 Act or Delaware law is amended by rule, regulation,
order, or no-action letter to eliminate or limit Shareholders' right to vote on
any specific matter, the Shareholders' right to vote shall be deemed to be
amended, modified or interpreted in accordance therewith without further
approval by the Trustees or the Shareholders. Shares may be voted in person or
by proxy or by any manner authorized by the Trustees. Unless the Trustees
declare otherwise, proxies may be given by any electronic or telecommunications
device, including telefax, telephone or through the Internet, but if a proposal
by anyone other than the officers or Trustees is submitted to a vote of the
Shareholders of any Series or Class, or if there is a proxy contest or proxy
solicitation or proposal in opposition to any proposal by the officers or
Trustees, Shares may be voted only in person or by written proxy unless the
Trustees specifically authorize other permissible methods of transmission.
Until Shares of a Series are issued, as to that Series the Trustees may
exercise all rights of Shareholders and may take any action required or
permitted to be taken by Shareholders by law, or this Declaration. 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.
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. Notice of any meeting of Shareholders shall be given or caused to be
given by the Trustees which shall specify the time and place of the meeting, and
the general nature of the business to be transacted. Shareholders shall be
entitled at least seven days notice of any meeting, given as determined by the
Trustees. 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 or her 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 Classes) is to vote as
a single Class separate from any other Shares, forty percent (40%) of the
Shares of each such Series (or Classes) entitled to vote shall constitute a
quorum at a Shareholder's meeting of that Series (or Class). 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 7(d),
when a quorum is present at any meeting, a majority of the Shares voted shall
decide any questions and a
15
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.
Where any provision of law or of this Declaration of Trust requires that the
holders of any Series (or Class) shall vote as a Series (or Class) on the matter
(or a plurality with respect to the election of a Trustee) the vote of a
majority of the Shares of the Series (or Class) shall decide that matter insofar
as that Series (or Class) is concerned.
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, by the By-Laws
or by applicable law) and holding a majority (or such larger proportion as
aforesaid) of the Shares of any Series (or Class) 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 (or Class) 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 more than ninety (90) days before the date of any meeting of
Shareholders, as the record date for determining the Shareholders of the Trust,
or 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 (or Class) 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 (or Class) 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 record dates for different
Series (or Classes).
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 7 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 Class) or net income
16
attributable to the Shares of any Series (or Class), 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. The Trust shall purchase such
Shares 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, in accordance with the By-Laws and applicable law. 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 any time the
New York Stock Exchange (the "Exchange") is closed for other than weekends or
holidays, or if permitted by 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 held with respect to such 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. In
the case of a suspension of the right of redemption as provided herein, a
Shareholder may either withdraw the request for redemption or receive payment
based on the net asset value per Share next determined after the termination of
such suspension.
The redemption price 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 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. The Trustees may
require Shareholders to redeem Shares for any reason under terms set by the
Trustees, including, but not limited to: (i) the determination of the Trustees
that direct or indirect ownership of Shares of any Series has or may become
concentrated in such Shareholder to an extent that would disqualify any Series
as a regulated investment company under the Internal Revenue Code of 1986, as
amended (or any successor statute thereto); (ii) the failure of a Shareholder
to supply a tax identification number if required to do so, or to have the
minimum investment required (which may vary by Series or Class); or (iii) the
failure of a Shareholder to pay when due for the purchase of Shares issued to
him. Any such redemption shall be effected at the redemption price and in the
manner provided in this Article VI.
Section 4. Disclosure of Ownership. The holders of Shares shall upon
demand disclose to the Trustees in writing such information with respect to
direct and indirect ownership of Shares as the Trustees deem necessary to comply
with the provisions of the Internal Revenue
17
Code of 1986, as amended (or any successor statute thereto), or to comply with
the requirements of any other taxing authority or other applicable law.
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 the advisory, management, legal, accounting, investment banking or
other services and payment for the same by the Trust.
Section 2. Standard of Care. The fiduciary duties of Trustees to the
Trust and its Shareholders are the same as those of the directors of a Delaware
corporation to the corporation and its shareholders.
Section 3. Indemnification and Limitation of Liability. A Trustee, when
acting in such capacity, shall not be personally liable to any Person, other
than the Trust or a Shareholder to the extent provided in this Article VII, for
any act, omission or obligation of the Trust, of such Trustee, or of any other
Trustee. A Trustee shall be liable to the Trust and to any Shareholder solely
for his or her own willful 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 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. The Trust shall indemnify each Person who is, or has been, a
Trustee, officer, employee or agent of the Trust, any Person who is serving or
has served at the Trust's request as a Trustee, officer, trustee, employee or
agent of another organization in which the Trust has any interest as a
shareholder, creditor or otherwise to the extent and in the manner provided in
the By-Laws.
All persons extending credit to, contracting with or having any claim
against the Trust or the Trustees shall look only to the assets of the
appropriate Series, or, if the Trustees have yet to establish Series, of the
Trust for payment under such credit, contract or claim; and neither the
Trustees nor the Shareholders, nor any of the Trust's officers, employees or
agents, whether past, present or future, shall be personally liable therefor.
Every note, bond, contract, instrument, certificate or undertaking and
every other act or thing whatsoever executed or done by or on behalf of the
Trust or Trustees by any of them in connection with the Trust shall
conclusively be deemed to have been executed or done only in or with respect to
his or their capacity as Trustee or Trustees, and such Trustee or Trustees
shall not be personally liable thereon. At the Trustees' discretion, any note,
bond, contract, instrument, certificate or undertaking made or issued by the
Trustees or by any officer or officers may give notice that the Certificate of
Trust is on file in the Office of the Secretary of State of the State of
18
Delaware and that a limitation on the liability of each Series exists and such
note, bond, contract, instrument, certificate or undertaking may, if the
Trustees so determine, recite that the same was executed or made on behalf of
the Trust or by a Trustee or Trustees in such capacity and not individually or
by an officer or officers in such capacity 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 on the assets and property of the
Trust or a Series thereof, and may contain such further recital as such Person
or Persons may deem appropriate. The omission of any such notice or recital
shall in no way operate to bind any Trustees, officers or Shareholders
individually.
Section 4. Trustee's Reliance, Expert Advice, No Bond or Surety. The
exercise by the Trustees of their powers and discretions hereunder shall be
binding upon everyone interested. 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 5. Insurance. The Trustees shall be entitled and empowered to
the fullest extent permitted by law to purchase with Trust assets insurance 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 or she becomes involved by virtue of his or her capacity
or former capacity with the Trust, whether or not the Trust would have the
power to indemnify him or her against such liability under the provisions of
this Article.
ARTICLE VIII.
MISCELLANEOUS
Section 1. 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 2. Termination of Trust or Series.
(a) Unless terminated as provided herein, the
Trust shall continue without limitation of time. The Trust may be terminated at
any time by vote of a majority of the Shares of each Series entitled to vote,
voting separately by Series, or by the Trustees by written notice to the
Shareholders. Any Series or Class may be terminated at any time by vote of a
majority of the Shares of that Series or Class entitled to vote, or by the
Trustees by written notice to the Shareholders of that Series or Class.
(b) Upon the requisite Shareholder vote or
action by the Trustees to terminate the Trust or any one or more Series of
Shares or any Class thereof, after paying or
19
otherwise providing for all charges, taxes, expenses and liabilities, whether
due or accrued or anticipated, of the Trust or of the particular Series of any
Class thereof as may be determined by the Trustees, the Trust shall, in
accordance with such procedures as the Trustees consider appropriate, reduce the
remaining assets of the Trust or of the affected Series or Class to
distributable form in cash or Shares (if any Series remain) or other securities,
or any combination thereof, and distribute the proceeds to the Shareholders of
the Series or Classes involved, ratably according to the number of Shares of
such Series or Class held by the several Shareholders of such Series or Class on
the date of distribution. Thereupon, the Trust or any affected Series or Class
shall terminate and the Trustees and the Trust shall be discharged of any and
all further liabilities and duties relating thereto or arising therefrom, and
the right, title and interest of all parties with respect to the Trust or such
Series or Class shall be canceled and discharged.
(c) Upon termination of the Trust, following
completion of winding up of its business, the Trustees shall cause a certificate
of cancellation of the Trust's Certificate of Trust to be filed in accordance
with the Delaware Act, which certificate of cancellation may be signed by any
one Trustee.
Section 3. Amendments. Except as specifically provided in this
Section, the Trustees may, without Shareholder vote, restate, amend or otherwise
supplement this Declaration of Trust. Shareholders shall have the right to vote:
(i) on any amendment that would
affect their right to vote granted in Article V, Section 1 hereof;
(ii) on any amendment to this Section
3 Article VIII;
(iii) on any amendment for which a
Shareholder vote may be required by applicable law or by the Trust's
registration statement filed with the Commission; and
(iv) on any amendment submitted to them
by the Trustees. Any amendment required or permitted to be submitted to the
Shareholders that, as the Trustees determine, shall affect the Shareholders of
one or more Series (or Class) shall be authorized by a vote of the Shareholders
of each Series (or Class) affected and no vote of Shareholders of a Series (or
Class) not affected shall be required. Notwithstanding anything else herein, no
amendment hereof shall limit the rights to indemnification referred in Article
VII, Section 3 hereof or as provided in the By-Laws with respect to any actions
or omissions of Persons covered thereby prior to such amendment. The Trustees
may, without Shareholder vote, restate, amend, or otherwise supplement the
Certificate of Trust as they deem necessary or desirable.
Section 4. 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. Anyone dealing with the Trust may rely on a certificate by an
officer of the Trust as to whether or not any such restatements and/or
20
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 restatements and/or 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 5. Applicable Law.
(a) The Trust is created under, and this
Declaration of Trust is to be governed by, and construed and enforced in
accordance with, the laws of the State of Delaware. The Trust shall be of the
type commonly called a statutory trust, and without limiting the provisions
hereof, the Trust specifically reserves the right to exercise any of the powers
or privileges afforded to statutory trusts or actions that may be engaged in by
statutory trusts under the Delaware Act, and the absence of a specific reference
herein to any such power, privilege or action shall not imply that the Trust may
not exercise such power or privilege or take such actions.
(b) Notwithstanding the first sentence of
Section 6(a) of this Article VIII, there shall not be applicable to the Trust,
the Trustees or this Declaration of Trust (x) the provisions of Section 3540 of
Title 12 of the Delaware Code or (y) any provisions of the laws (statutory or
common) of the State of Delaware (other than the Delaware Act) pertaining to
trusts that relate to or regulate:
(i) the filing with any court or
governmental body or agency of trustee accounts or schedules of trustee fees and
charges;
(ii) affirmative requirements to post
bonds for trustees, officers, agents or employees of the trust;
(iii) the necessity for obtaining a
court or other governmental approval concerning the acquisition, holding or
disposition of real or personal property;
(iv) fees or other sums applicable for
trustees, officers, agents or employees of a trust;
(v) the allocation of receipts and
expenditures to income or principal;
(vi) restrictions or limitations on the
permissible nature, amount or concentration of trust investments or requirements
relating to the titling, storage or other manner of holding of trust assets; or
21
(vii) the establishment of fiduciary or
other standards or responsibilities or limitations on the acts or powers of
trustees that are inconsistent with the limitations or liabilities or
authorities and powers of the Trustees set forth or referenced in this
Declaration of Trust.
Section 6. Provisions in Conflict with Law or Regulations.
(a) The provisions of this 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 this Declaration of Trust; provided, however, that
such determination shall not affect any of the remaining provisions of this
Declaration of Trust or render invalid or improper any action taken or omitted
prior to such determination.
(b) If any provision of this 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 this Declaration of Trust in any
jurisdiction.
Section 7. Statutory Trust Only. It is the intention of the Trustees
to create a statutory trust pursuant to the Delaware Act, and thereby to create
only the relationship of Trustee and beneficial owners within the meaning of
such Delaware Act between the Trustees and each Shareholder. 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 statutory trust pursuant to such Delaware Act.
Nothing in this Declaration of Trust shall be construed to make the
Shareholders, either by themselves or with the Trustees, partners or members of
a joint stock association.
Section 8. Derivative Actions. In addition to the requirements set
forth in Section 3816 of the Delaware Act, a Shareholder may bring a derivative
action on behalf of the Trust only if the following conditions are met:
(a) The Shareholder or Shareholders must make a
pre-suit demand upon the Trustees to bring the subject action unless an effort
to cause the Trustees to bring such an action is not likely to succeed. For
purposes of this Section 8(a), a demand on the Trustees shall only be deemed not
likely to succeed and therefore excused if a majority of the Board of Trustees,
or a majority of any committee established to consider the merits of such
action, has a personal financial interest in the transaction at issue, and a
Trustee shall not be deemed interested in a transaction or otherwise
disqualified from ruling on the merits of a Shareholder demand by virtue of the
fact that such Trustee receives remuneration for his service on the Board of
Trustees of the Trust or on the boards of one or more Trusts that are under
common management with or otherwise affiliated with the Trust.
22
(b) Unless a demand is not required under
paragraph (a) of this Section 8, Shareholders eligible to bring such derivative
action under the Delaware Act who hold at least 10% of the outstanding Shares of
the Trust, or 10% of the outstanding Shares of the Series or Class to which such
action relates, shall join in the request for the Trustees to commence such
action; and
(c) Unless a demand is not required under
paragraph (a) of this Section 8, the Trustees must be afforded a reasonable
amount of time to consider such Shareholder request and to investigate the basis
of such claim. The Trustees shall be entitled to retain counsel or other
advisors in considering the merits of the request and shall require an
undertaking by the Shareholders making such request to reimburse the Trust for
the expense of any such advisors in the event that the Trustees determine not to
bring such action.
For the purposes of this Section 8, the
Board of Trustees may designate a committee of one Trustee to consider a
Shareholder demand and if necessary to create a committee with a majority of
Trustees who do not have a personal financial interest in the transaction at
issue. The Trustees shall be entitled to retain counsel or other advisors in
considering the merits of the request and shall require an undertaking by the
Shareholders making such request to reimburse the Trust for the expense of any
such advisors in the event that the Trustees determine not to bring such action.
[the remainder of this page left intentionally blank]
23
IN WITNESS WHEREOF, each of the undersigned Trustees as aforesaid do hereto set
their hands this 5th day of December, 2007.
/s/ Xxxxxxx Xxxxxxxxxx
---------------------------
Xxxxxxx Xxxxxxxxxx
/s/ Xxxx X. Xxxxxxxxx
---------------------------
Xxxx X. Xxxxxxxxx
/s/ Xxxxxxx X. Xxxxxx
---------------------------
Xxxxxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxx
---------------------------
Xxxxxxx X. Xxxx
THE PRINCIPAL PLACE OF BUSINESS OF THE TRUST IS:
000 XXXXXXXXXX XXXXXX
XXX XXXXXXXXX, XX 00000
24
AGREEMENT AND DECLARATION OF TRUST
OF
LAUDUS INSTITUTIONAL TRUST
TABLE OF CONTENTS
ARTICLE I
NAMES AND DEFINITIONS 1
Name 1
Definitions 1
ARTICLE II
PURPOSE OF THE TRUST 3
ARTICLE III
SHARES 3
Division of Beneficial Interest 3
Ownership of Shares 4
Transfer of Shares 4
Investments in the Trust 4
Status of Shares and Limitation of Personal Liability 5
Power of Board of Trustees to Change Provisions Relating to Shares 5
Establishment and Designation of Shares 5
ARTICLE IV
THE BOARD OF TRUSTEES 8
Number, Election and Tenure 8
Effect of Death, Resignation, etc. of a Trustee 8
Powers 9
Payment of Expenses by the Trust 12
Payment of Expenses by Shareholders 12
Ownership of Assets of the Trust 13
Service Contracts 13
ARTICLE V
SHAREHOLDERS' VOTING POWERS AND MEETINGS 14
Voting Powers 14
Voting Power and Meetings 15
Quorum and Required Vote 15
Action by Written Consent 16
Record Dates 16
Additional Provisions 16
ARTICLE VI
NET ASSET VALUE, DISTRIBUTIONS, AND REDEMPTIONS 17
Determination of Net Asset Value, Net Income, and Distributions 17
Redemptions and Repurchases 17
Redemptions at the Option of the Trust 17
Disclosure of Ownership 18
ARTICLE VII
COMPENSATION AND LIMITATION OF LIABILITY OF TRUSTEES 18
Compensation 18
Standard of Care 18
Indemnification and Limitation of Liability 18
Trustee's Good Faith Action, Expert Advice, No Bond or Surety 19
Insurance 19
ARTICLE VIII
MISCELLANEOUS 19
Liability of Third Persons Dealing with Trustees 20
Termination of Trust or Series 20
Amendments 20
Filing of Copies, References, Headings 21
Applicable Law 21
Provisions in Conflict with Law or Regulations 22
Statutory Trust Only 22
Derivative Actions 23
