1
EXHIBIT (1)(a)
AGREEMENT AND DECLARATION OF TRUST
OF
CONESTOGA FAMILY OF FUNDS
This AGREEMENT AND DECLARATION OF TRUST, made at Boston,
Massachusetts this 1st day of August, 1989 by and between the Settlor named
below and the Trustee whose signature is set forth below (the "Initial
Trustee"),
W I T N E S S E T H T H A T:
WHEREAS, Xxxxx X. Xxxxx, an individual residing in Natick,
Massachusetts (the "Settlor"), proposes to deliver to the Initial Trustee the
sum of one hundred dollars ($100.00) lawful money of the United States of
America in trust hereunder and to authorize the Initial Trustee and all other
Persons acting as Trustees hereunder to employ such funds, and any other funds
coming into their hands or the hands of their successor or successors as such
Trustees, to carry on the business of an investment company, and as such of
buying, selling, investing in or otherwise dealing in and with stocks, bonds,
debentures, warrants, options, futures contracts and other securities and
interests therein, or calls or puts with respect to any of the same, or such
other and further investment media and other property as the Trustees may deem
advisable, which are not prohibited by law or the terms of this Declaration of
Trust; and
WHEREAS, the Initial Trustee is willing to accept such sum,
together with any and all additions thereto and the income or increments
thereof, upon the terms, conditions and trusts hereinafter set forth; and
WHEREAS, it is proposed that the assets held by the Trustees
may be divided into separate funds or portfolios, each with its own separate
investment assets, investment objective, policies and purposes, and that the
beneficial interest in each such fund or portfolio be divided into transferable
shares of beneficial interest, with one or more separate classes of shares for
each fund or portfolio, all in accordance with the provisions hereinafter set
forth; and
WHEREAS, it is desired that the trust established hereby (the
"Trust") be managed and operated as a trust with transferable shares under the
laws of Massachusetts, of the type commonly known as and referred to as a
Massachusetts trust with transferable Shares, in accordance with the provisions
hereinafter set forth;
2
NOW, THEREFORE, the Initial Trustee, for himself and his
successors as Trustees, hereby declares, and agrees with the Settlor, for
himself and for all Persons who shall hereafter become holders of shares of
beneficial interest of the Trust that the Trustees will hold the sum delivered
to them upon the execution hereof, and all other and further cash, securities
and other property of every type and description which they may in any way
acquire in their capacity as such Trustees, together with the income therefrom
and the proceeds thereof, IN TRUST NEVERTHELESS, to manage and dispose of the
same for the benefit of the holders from time to time of the shares of
beneficial interest of the several classes being issued and to be issued
hereunder and in the manner and subject to the provisions hereof, to wit:
I.
NAME
This trust shall be known as CONESTOGA FAMILY OF FUNDS
(hereinafter called the "Trust"), and the Trustees shall conduct the business
of the Trust under that name or any other name as they shall from time to time
determine.
II.
DEFINITIONS
2.1 Definition of Certain Terms. As used in this
Declaration of Trust, the terms set forth below shall have the following
meanings:
A. The "Act" refers to the Investment Company
Act of 1940, as now or hereafter amended, to the rules and regulations adopted
from time to time thereunder and to any order or orders thereunder which may
from time to time be applicable to the Trust.
B. The terms "affiliated person," "assignment"
and "interested person" shall have the respective meanings set forth in the
Act. The term "vote of a majority of outstanding Shares" shall mean the "vote
of a majority of the outstanding voting securities" as defined in the Section
2(a)(42) of the Act.
C. The "Regulations" shall refer to the Code of
Regulations of the Trust as adopted and amended from time to time.
D. The "Declaration of Trust" shall mean this
Declaration of Trust as amended or restated from time to time.
-2-
3
E. "Person" shall mean a natural person, a
corporation, a partnership, an association, a joint-stock company, a trust, a
fund or any organized group of persons whether incorporated or not.
F. "Shares" means the equal proportionate
transferable units of interest of each class into which the beneficial interest
in the Trust may be classified or reclassified from time to time by the
Trustees acting under this Declaration of Trust, or in the absence of such
action, means the equal proportionate transferable units of interest into which
the entire beneficial interest in the Trust shall be divided from time to time,
and includes fractions of Shares as well as whole Shares.
G. "Shareholder" means a record owner of Shares
in the Trust.
H. The "Trustees" refers to the individual
trustees of the Trust named herein or elected in accordance with Article VI
hereof in their capacity as trustees hereunder and not as individuals and to
their successor or successors while serving in office as a trustee of the
Trust, and includes a single trustee.
I. "Trust Property" means any and all assets and
property, real or personal, tangible or intangible, which is owned or held by
or for the account of the Trust or the Trustees.
III.
PURPOSE OF TRUST; AGENT FOR SERVICE
The Trust is a Massachusetts trust with transferable Shares of
the type described in Chapter 182 Section I of the General Laws of the
Commonwealth of Massachusetts formed for the purpose of acting as a management
investment company under the Act; provided, however, that the Trust may
exercise all powers which are ordinarily exercised by or permissible for
Massachusetts trusts with transferable Shares.
The Agent of the Trust for Service of Process within the
Commonwealth of Massachusetts shall be: CT Corporation System, Xxx Xxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000.
-3-
4
IV.
OWNERSHIP OF ASSETS OF THE TRUST
The assets of the Trust shall be held separate and apart from
any assets now or hereafter held in any capacity, other than as Trustees
hereunder, by the Trustees, including without limitation any successor
Trustees. Legal title to all the assets of the Trust shall be vested in the
Trustees as joint tenants except that the Trustees shall have power to cause
legal title to any assets of the Trust 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 reasonably determine. The
right, title and interest of the Trustees in the assets of the Trust shall vest
automatically in each person who may hereafter become a Trustee. Upon the
resignation, removal or death of a Trustee, such Trustee shall automatically
cease to have any right, title or interest in any of the assets of the Trust,
and the right, title and interest of such Trustee in the assets of the Trust
shall vest automatically in the remaining Trustees. Such vesting and cessation
of title shall be effective regardless of whether conveyancing documents
(pursuant to Section 6.6 hereof or otherwise) have been executed and delivered.
Except to the extent otherwise required by Article V hereof, no Shareholder
shall be deemed to have severable ownership in any individual asset of the
Trust or any right of partition or possession thereof, or shall be called upon
to assume any loss of the Trust or suffer an assessment of any kind by virtue
of his ownership of Shares, but each Shareholder shall have a proportionate
undivided beneficial interest in the assets belonging to a particular class or
classes of Shares to the extent provided in Article V. The ownership of the
Trust Property of every description and the right to conduct any business
hereinbefore described shall be vested exclusively in the Trustees, and the
Shareholders shall have no interest therein other than the beneficial interest
conferred by their Shares, and they shall have no right to call for any
partition or division of any property, profits, rights or interests of the
Trust nor can they be called upon to assume any losses of the Trust or suffer
an assessment of any kind by virtue of their ownership of Shares. The Shares
shall be personal property giving only the rights specifically set forth in
this Declaration of Trust. Shares shall not entitle any holder thereof to
preference, preemptive, appraisal, conversion or exchange rights, except as the
Trustees may determine pursuant to Article V hereof.
-4-
5
V.
SHAREHOLDERS; BENEFICIAL INTEREST IN THE TRUST;
PURCHASE AND REDEMPTION OF SHARES
5.1 Shares in the Trust.
A. The beneficial interest in the Trust shall at
all times be divided into an unlimited number of full and fractional
transferable Shares with a par value of $.001 per share. All Shares shall be
of one class, provided that subject to this Declaration of Trust and the
requirements of applicable law, the Trustees shall have the power to classify
or reclassify any unissued Shares into any number of additional classes of
Shares by setting or changing in any one or more respects, from time to time
before the issuance thereof, their designations, preferences, conversion or
other rights, voting powers, restrictions, limitations, qualifications or terms
or conditions of redemption, and provided further that the investment
objectives, policies and restrictions governing the management and operations
of the Trust, including the management of assets belonging to any class of
Shares, may from time to time be changed or supplemented by the Trustees,
subject to the requirements of the Act. The power of the Trustees to classify
or reclassify Shares shall include, without limitation, the power to classify
or reclassify any class of Shares into one or more series of such class. A
copy of each action of the Trustees by which Shares are classified or
reclassified pursuant to this subsection 5.1(A), executed by a majority of the
Trustees (or by an officer of the Trust pursuant to a vote of a majority of the
Trustees), shall be kept at the office of the Trust where it may be inspected
by any Shareholder, and one copy of each such instrument shall be filed with
the Secretary of The Commonwealth of Massachusetts, as well as with any other
governmental office where such filing may from time to time be required by the
laws of Massachusetts. All references to Shares in this Declaration of Trust
which are not accompanied by a reference to any particular class of Shares
shall be deemed to apply to all outstanding Shares of any and all classes. All
references in this Declaration of Trust to any class of Shares shall include
and refer to the Shares of any series thereof.
Upon the issuance of the first Share of a second class of
Shares classified or reclassified by the Trustees pursuant to this Section 5.1,
all Shares theretofore issued and outstanding shall automatically represent
Shares of a separate class having the preferences, conversion and other rights,
voting powers, restrictions, limitations, qualifications and terms and
conditions of redemption provided for in this Declaration of Trust with respect
to any class of Shares. The Trustees may from time to time divide or combine
the outstanding Shares of the Trust, or of any class or classes with the same
alphabetical
-5-
6
designation, into a greater or lesser number without thereby changing the
proportionate beneficial interest of the Shares in the Trust as so divided or
combined or in the assets belonging to such class or classes, as the case may
be.
At any time that there are no Shares outstanding of a
particular class previously established and designated, the Trustees may
abolish that class and the establishment and designation thereof.
B. Subject always to the power of the Trustees
to classify and reclassify any unissued Shares pursuant to subsection A of this
Section 5.1, Shares of the Trust shall (unless the Trustees otherwise determine
with respect to a class of Shares at the time of establishing and designating
the same) have the following designations, preferences, conversion and other
rights, voting powers, restrictions, limitations, qualifications and terms and
conditions of redemption:
(1) Designations. The Board of Trustees
shall give each class of Shares an alphabetical designation ("A," "B," "C,"
etc.), and may give any class of Shares such supplementary designations as the
Board may deem appropriate. More than one class of Shares may have the same
alphabetical designation.
(2) Assets Belonging to Classes With
Same Alphabetical Designation. All consideration received by the Trust for the
issue and sale of Shares of any class shall be commingled, invested and
reinvested together with the consideration received by the Trust for the issue
and sale of Shares of such other class or classes, if any, that have the same
alphabetical designation, along with all income, earnings, profits and proceeds
derived from the investment thereof, including any proceeds derived from the
sale, exchange or liquidation of such investments, any funds or payments
derived from any reinvestment of such proceeds in whatever form the same may
be, and any general assets of the Trust not belonging to a particular class
which the Trustees may, in their sole discretion, allocate to such classes
having the same alphabetical designation, and shall irrevocably belong to the
classes with respect to which such assets, payments or funds were received or
allocated for all purposes,, subject only to the rights of creditors, and shall
be so handled upon the books of account of the Trust. For purposes of this
Declaration of Trust, such assets and the income, earnings, profits and
proceeds thereof, including any proceeds derived from the sale, exchange or
liquidation thereof, and any assets derived from any reinvestment of such
proceeds in whatever form, are referred to as "assets belonging to" such
classes. Each Share of the classes having the same alphabetical designation
shall share equally with each other Share of such classes in the assets
belonging to such classes.
-6-
7
Shareholders of any class of Shares shall have no right, title or interest in
or to the assets belonging to any class of Shares with a different alphabetical
designation.
(3) Liabilities Belonging to Classes
With Same Alphabetical Designation. The assets belonging to classes of Shares
with the same alphabetical designation shall be charged with the direct
liabilities in respect of such classes and shall also be charged with such
classes' proportionate share of the general liabilities of the Trust as
determined by comparing the assets belonging to such classes with the aggregate
assets of the Trust, provided, that the Board of Trustees may, in their
discretion, direct that any one or more general liabilities of the Trust be
allocated to the respective classes on a different basis. The liabilities so
charged to such classes are herein referred to as "liabilities belonging to"
such classes, and each Share of such classes shall be charged equally with each
other Share of a class having the same alphabetical designation with the
liabilities belonging to such classes, except that:
(a) A class of Shares with respect
to which agreements are entered into by or on behalf of the Trust pursuant to
which institutions agree to provide services with respect to beneficial owners
of Shares of that class but not with respect to beneficial owners of Shares of
other classes with the same alphabetical designation shall bear the expenses
and liabilities relating to such agreements, as well as any other expenses
directly attributable to such class of Shares which the Trustees determine
should be borne solely by such class; and
(b) A class of Shares shall not be
required to bear the expenses and liabilities relating to any agreement
described in clause (a) above pursuant to which an institution agrees to
provide services with respect to beneficial owners of Shares of other classes
with the same alphabetical designation but not to beneficial owners of Shares
of that class, or any other expenses directly attributable to one or more other
classes of Shares which the Trustees determine should be borne solely by such
other class or classes.
(4) Dividends and Distributions. Shares
of classes having the same alphabetical designation shall be entitled to such
dividends and distributions, in Shares or in cash or both, as may be declared
from time to time by the Trustees, acting in their sole discretion, with
respect to such classes, provided that such dividends and distributions shall
be paid only out of the lawfully available "assets belonging to" such classes
as such term is defined in subsection B(2) of this Section 5.1.
(5) Liquidating Distributions. In the
event of the termination of the Trust and the winding up of its
-7-
8
affairs, the Shareholders of classes having the same alphabetical designation
shall be entitled to receive out of the assets of the Trust available for
distribution to Shareholders, but other than general assets not belonging to
any particular class of Shares, the assets belonging to such classes and the
assets so distributable to the Shareholders of such classes shall, subject to
the allocation of certain liabilities to a particular class as set forth in
subsection B(3) of this Section 5.1, be distributed among such shareholders in
proportion to the number of Shares of such classes held by them and recorded in
their name on the books of the Trust. In the event that there are any general
assets not belonging to any particular class of Shares and available for
distribution, the Shareholders of classes having the same alphabetical
designation shall be entitled to receive a portion of such general assets
determined by comparing the assets belonging to such classes with the aggregate
assets of the Trust; and the assets so distributable to the Shareholders of
such classes shall, subject to the allocation of certain liabilities to a
particular class as set forth in subsection B(3) of this Section 5.1, be
distributed among such Shareholders in proportion to the number of Shares of
such classes held by them and recorded in their name on the books of the Trust.
(6) Voting. The holder of each Share
shall be entitled to one vote for each full Share, and a proportionate
fractional vote for each fractional Share, irrespective of the class, then
recorded in his name on the books of the Trust, to the extent provided in
Article VIII hereof.
(7) Preemptive Rights. Shareholders
shall have no preemptive or other rights to subscribe to any additional Shares
or other securities issued by the Trust.
(8) Conversion Rights. The Trustees
shall have the authority to provide from time to time that the holders of
Shares of any class shall have the right to convert or exchange said Shares for
or into Shares of one or more other classes in accordance with such
requirements and procedures as may be established from time to time by the
Trustees.
(9) Redemption of Shares. To the extent
of the assets of the Trust legally available for such redemptions, a
Shareholder of the Trust shall have the right to require the Trust to redeem
his full and fractional Shares of any class out of assets belonging to the
classes with the same alphabetical designation as such class at a redemption
price equal to the net asset value per Share next determined after receipt of a
request to redeem in proper form as determined by the Trustees, subject to the
right of the Trustees to suspend the right of redemption of Shares or postpone
the date of payment of such redemption price in accordance with the provisions
of applicable law. The Trustees shall establish such rules and procedures as
they deem
-8-
9
appropriate for the redemption of Shares, provided that all redemptions shall
be in accordance with the Act. without limiting the generality of the
foregoing, the Trust shall, to the extent permitted by applicable law, have the
right at any time to redeem the Shares owned by any holder thereof: (a) in
connection with the termination of any class of Shares as provided hereunder;
(b) if the value of such Shares in the account or accounts maintained by the
Trust or its transfer agent for any class or classes of Shares is less than the
value determined from time to time by the Trustees as the minimum required for
an account or accounts of such class or classes, provided that the Trust shall
provide a Shareholder with written notice at least fifteen (15) days prior to
effecting a redemption of Shares as a result of not satisfying such
requirement; (c) to reimburse the Trust for any loss it has sustained by reason
of the failure of such Shareholder to make full payment for Shares purchased by
such Shareholder; (d) to collect any charge relating to a transaction effected
for the benefit of such Shareholder which is applicable to Shares as provided
in the prospectus relating to such Shares; or (e) if the net income with
respect to any particular class of Shares should be negative or it should
otherwise be appropriate to carry out the Trust's responsibilities under the
Act, in each case subject to such further terms and conditions as the Trustees
may from time to time establish. The redemption price of Shares in the Trust
shall, except as otherwise provided in this subsection, be the net asset value
thereof as determined by the Trustees from time to time in accordance with the
provisions of applicable law, less such redemption fee or other charge, if any,
as may be fixed by the Trustees. When the net income of any class with respect
to which the Trustees have, in their discretion, established a policy of
maintaining a constant net asset value per Share is negative or whenever deemed
appropriate by the Trustees in order to carry out the Trust's responsibilities
under the Act, the Trust may, without payment of compensation but in
consideration of the interests of the Trust and the holders of Shares of such
class in maintaining a constant net asset value per Share of such class, redeem
pro rata from each holder of record on such day, such number of full and
fractional Shares of such class as may be necessary to reduce the aggregate
number of outstanding Shares in order to permit the net asset value thereof to
remain constant. Payment of the redemption price, if any, shall be made in
cash by the Trust at such time and in such manner as may be determined from
time to time by the Trustees unless, in the opinion of the Trustees, which
shall be conclusive, conditions exist which make payment wholly in cash unwise
or undesirable; in such event the Trust may make payment in the assets
belonging or allocable to the classes of Shares having the same alphabetical
designation as the class of the Shares redemption of which is being sought, the
value of which shall be determined as provided herein.
-9-
10
(10) Termination of Classes. Without the
vote of the Shares of any class then outstanding (unless otherwise required by
applicable law), the Trustees may:
(a) Sell and convey the assets
belonging to any class or classes of Shares having the same alphabetical
designation to another trust or corporation that is a management investment
company (as defined in the Act) and is organized under the laws of any state of
the United States for consideration which may include the assumption of all
outstanding obligations, taxes and other liabilities, accrued or contingent,
belonging to such class(es) and which may include securities issued by such
trust or corporation. Following such sale and conveyance, and after making
provision for the payment of any liabilities belonging to such class(es) that
are not assumed by the purchaser of the assets belonging to such class(es), the
Trust may, at the Trustees' option, redeem all outstanding Shares of such
class(es) at net asset value as determined by the Trustees in accordance with
the provisions of applicable law, less such redemption fee or other charge, if
any, as may be fixed by the Trustees. Notwithstanding any other provision of
this Declaration of Trust to the contrary, the redemption price may be paid in
cash or by distribution of the securities or other consideration received by
the Trust for the assets belonging to such class(es) upon such conditions as
the Trustees deem, in their sole discretion, to be appropriate consistent with
applicable law and this Declaration of Trust;
(b) Sell and convert the assets
belonging to any class or classes of Shares having the same alphabetical
designation into cash and, after making provision for the payment of all
obligations, taxes and other liabilities, accrued or contingent, belonging to
such class(es), the Trust may, at the Trustees, option, (i) redeem all
outstanding Shares of such class(es) at net asset value as determined by the
Trustees in accordance with the provisions of applicable law, less such
redemption fee or other charge, if any, as may be fixed by the Trustees upon
such conditions as the Trustees deem, in their sole discretion, to be
appropriate consistent with applicable law and this Declaration of Trust; or
(ii) combine the assets belonging to such class(es) following such sale and
conversion with the assets belonging to any one or more other class(es) of
Shares having a different alphabetical designation pursuant to and in
accordance with subsection (c) of this Section 5.1(B)(10);
(c) Combine the assets belonging to
any class or classes of Shares having the same alphabetical designation with
the assets belonging to any one or more other classes of Shares having a
different alphabetical designation if the Trustees reasonably determine that
such combination will not have a material adverse effect on the Shareholders of
any class
-10-
11
participating in such combination. In connection with any such combination of
assets the Shares of any class then outstanding may, if so determined by the
Trustees, be converted into Shares of any other class or classes of Shares
participating in such combination, or may be redeemed, at the option of the
Trustees, at net asset value as determined by the Trustees in accordance with
the provisions of applicable law, less such redemption fee or other charge, or
conversion cost, if any, as may be fixed by the Trustees upon such conditions
as the Trustees deem, in their sole discretion, to be appropriate consistent
with applicable law and this Declaration of Trust. Notwithstanding any other
provision of this Declaration of Trust to the contrary, any redemption price,
or part thereof, paid pursuant to this subsection may be paid in Shares of any
other class or classes participating in such combination; or
(d) Otherwise terminate and wind up
the affairs of any class or classes of Shares having the same alphabetical
designation in accordance with this Declaration of Trust and applicable law.
In connection with such termination of a class or classes of Shares having the
same alphabetical designation and the winding up of the affairs of such
class(es), all of the powers of the Trustees under this Declaration of Trust
shall continue until the affairs of such class(es) shall have been wound up,
including the power to fulfill or discharge the contracts of the Trust relating
to such class(es), to collect assets belonging to such class(es), to sell,
convey, assign, exchange, transfer or otherwise dispose of all or any part of
the remaining assets belonging to such class(es) to one or more persons at
public or private sale for consideration that may consist in whole or in part
of cash, securities or other property of any kind, to discharge or pay the
liabilities belonging to such class(es), and to do all other acts appropriate
to liquidate the business of such class(es), provided that the holders of
Shares of any class shall not be entitled in any liquidation to receive any
distribution upon the assets belonging to any other class that has a different
alphabetical designation.
If no Shares of a class then remain outstanding, or after the
excess of the assets belonging to any class(es) of Shares over the liabilities
belonging to such class(es) has been distributed among the Shareholders of such
class(es) as provided in this Declaration of Trust, the Trustees may authorize
the termination of such class(es) of Shares.
5.2 Purchase of Shares. The Trustees may accept
investments in the Trust from such persons for such consideration, including
cash or property, and on such other terms as they may from time to time
authorize and the Trustees may in such manner acquire other assets (including
the acquisition of assets subject to, and in connection with, the
-11-
12
assumption of liabilities) and businesses. The Trustees may in their
discretion reject any order for the purchase of Shares.
5.3 Net Asset Value Per Share. The net asset value per
Share of any class of Shares shall be computed at such time or times as the
Trustees may specify pursuant to the Act. Assets shall be valued and net asset
value per Share shall be determined by such person or persons as the Trustees
may appoint under the supervision of the Trustees in such manner as the
Trustees may determine not inconsistent with the Act.
5.3 Ownership of Shares. The ownership of Shares shall
be recorded on the record books of the Trust. The Trustees may make such rules
and regulations as they consider appropriate for the issuance of Share
certificates, the transfer of Shares and similar matters. Certificates
certifying the ownership of Shares may be issued as the Trustees may determine
from time to time, provided that the Trustees shall have the power to call
outstanding Share certificates and to replace them with book entries. The
record books of the Trust shall be conclusive as to the identity of holders of
Shares and as to the number of Shares held by each Shareholder.
VI.
THE TRUSTEES
6.1 Management of the Trust. The affairs of the Trust
shall be managed by the Trustees and they shall have all powers necessary or
desirable to carry out such responsibility, including without limitation the
appointment of and delegation of responsibility to such officers, employees,
agents, and contractors as they may select.
6.2 Number and Term of Office. The number of Trustees
shall be determined from time to time by the Trustees themselves, but shall not
be more than ten. Subject to the provisions of this section relating to
resignation or removal, the Trustees shall have the power to set and alter the
terms of office of the Trustees, and they may at any time lengthen or shorten
their own terms or make their terms of unlimited duration, provided that the
term of office of any incumbent Trustee shall continue until terminated as
provided in the concluding sentence of this Section 6.2 or, if not so
terminated until the election of such Trustee's successor in office has become
effective in accordance with this section. A Trustee shall qualify by
accepting in writing his election or appointment and agreeing to be bound by
the provisions of this Declaration of Trust. Except as otherwise provided
herein in the case of vacancies, Trustees (other than the Initial Trustee
provided in Section 6.3 hereof) shall be elected by the Shareholders at such
time or times as the Trustees
-12-
13
shall determine that such election is required under Section 16(a) of the Act
or is otherwise advisable. Notwithstanding the foregoing, (a) any Trustee may
resign as a Trustee by written instrument signed by him and delivered to the
other Trustees at the principal business office of the Trust (without need for
prior or subsequent accounting), which shall take effect upon such delivery or
upon such later date as is specified therein; (b) any Trustee may be removed at
any time with or without cause by written instrument, signed by a least
two-thirds of the number of Trustees in office prior to such removal,
specifying the date when such removal shall become effective; (c) any Trustee
who has become incapacitated by illness or injury may be removed by written
instrument signed by a majority of the other Trustees; and (d) the term of a
Trustee shall terminate at his death, resignation, removal or adjudicated
incompetency.
6.3 Initial Trustee. The initial Trustee shall be Xxxxxx
X. Xxxxxxx, who, by his execution hereof, has agreed to be bound by the
provisions of this Declaration of Trust. The initial Trustee shall have the
power to appoint additional Trustees prior to any public meeting.
6.4 Quorum. At all meetings of the Trustees, a majority
of the Trustees shall constitute a quorum for the transaction of business and
the action of a majority of the Trustees present at any meeting at which a
quorum is present shall be the action of the Trustees unless the concurrence of
a greater proportion is required for such action by law, the Regulations or
this Declaration of Trust. If a quorum shall not be present at any meeting of
Trustees, the Trustees present thereat may by a majority vote adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present. Meetings may be held by means of a
conference telephone circuit or similar communications equipment by means of
which all persons participating may hear each other. The Trustees may also act
without a meeting, unless provided otherwise in this Declaration of Trust or
required by law, by written consent of a majority of the Trustees. As used
herein, a "majority of the Trustees" shall mean a majority of the Trustees in
office at the time in question or if there shall be only one (1) Trustee in
office then such term shall mean such Trustee.
The Trustees may appoint committees of Trustees and delegate
powers to them as provided in the Regulations. Any committee of the Trustees,
including an executive committee, if any, may act with or without a meeting. A
quorum for all meetings of any such committee shall be a majority of the
members thereof. Unless provided otherwise in this Declaration of Trust, any
action of any such committee may be taken at a meeting by vote of a majority of
the members present (a quorum being
-13-
14
present) or without a meeting by unanimous written consent of the members.
6.5 Vacancies. In case a vacancy shall exist by reason of
an increase in number, or for any other reason, the remaining Trustee or
Trustees may fill such vacancy by appointing such other person as he or they in
their discretion shall select. An appointment of a Trustee may be made in
anticipation of a vacancy to occur at a later date by reason of retirement or
resignation of a Trustee or an increase in the number of Trustees; provided,
that such appointment will not become effective prior to such retirement or
resignation or such increase in the number of Trustees. Whenever a vacancy in
the number of Trustees shall occur, until such vacancy is filled as provided in
this Section 6.5, the Trustee or Trustees then in office, regardless of number,
shall have all the powers granted to the Trustees, and shall discharge all the
duties imposed on the Trustees, by this Declaration of Trust. A written
instrument certifying the existence of such vacancy signed by a majority of the
Trustees shall be conclusive evidence of the existence of such vacancy. Such
appointment shall be evidenced by a written instrument signed by a majority of
the then Trustees but the appointment shall not take effect until the
individual so named shall have qualified by accepting in writing the
appointment and agreeing to be bound by the terms of this Declaration of Trust.
A vacancy may also be filled by the Shareholders in an election held at an
annual or special meeting. As soon as any Trustee so appointed or elected
shall have qualified, the Trust estate shall vest in the new Trustee or
Trustees, together with the continuing Trustees, without any further act or
conveyance.
6.6 Effect of Death, Resignation, etc. of Trustee. The
death, resignation, removal, or incapacity of the Trustees, or any one of them,
shall not operate to annul the Trust or to revoke any existing agency created
pursuant to the terms of this Declaration of Trust. Upon the resignation or
removal of a Trustee, or his otherwise ceasing to be a Trustee, he shall
execute and deliver such documents as the remaining Trustees shall require for
the purpose of conveying to the Trust or the remaining Trustees any Trust
Property held in the name of the resigning or removed Trustee. Upon the
incapacity or death of any Trustee, his legal representative shall execute and
deliver on his behalf such documents as the remaining Trustees shall require as
provided in the preceding sentence. The failure to request or deliver such
documents shall not affect the operation of the provisions of Article IV
hereof.
6.7 Powers. The Trustees in all instances shall act as
principals and are and shall be free from the control of the Shareholders. 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
-14-
15
desirable in connection with the management of the Trust. The Trustees shall
not be bound or limited by present or future laws or customs in regard to Trust
investments, but shall have full authority and power to make any and all
investments which they, in their uncontrolled discretion, shall deem proper to
accomplish the purpose of this Trust. Without limiting the foregoing, and
subject to any applicable limitation in this Declaration of Trust or the
Regulations, the Trustees shall have power and authority:
A. To conduct, operate and carry on, either
directly or through one or more wholly-owned subsidiaries, the business of an
investment company or any other lawful business activity which the Trustees, in
their sole and absolute discretion, consider to be (1) incidental to the
business of the Trust or any class of Shares as an investment company, (2)
conducive to or expedient for the benefit or protection of the Trust or the
Shareholders of any class of Shares, or (3) calculated in any other manner to
promote the interests of the Trust or the Shareholders of any class of Shares.
B. To adopt Regulations not inconsistent with
this Declaration of Trust providing for the conduct of the affairs of the Trust
and to amend and repeal them to the extent that they do not reserve that right
solely to the Shareholders.
C. To issue, sell, repurchase, redeem, retire,
cancel, acquire, hold, resell, reissue, dispose of, transfer, and otherwise
deal in Shares of the Trust; and to apply to any such repurchase, redemption,
retirement, cancellation or acquisition of Shares, any funds or other assets of
the Trust, whether constituting capital or surplus or otherwise, to the full
extent now or hereafter permitted by applicable law; and to divide or combine
Shares without thereby changing the proportionate beneficial interest in the
Trust.
D. To issue, acquire, hold, resell, convey,
write options on, and otherwise deal in securities, debt instruments and other
instruments and rights of a financial character and to apply to any acquisition
of securities any property of the Trust whether from capital or surplus or
otherwise.
E. To invest and reinvest cash, and to hold cash
uninvested.
F. To borrow money, issue guarantees of
indebtedness or contractual obligations of others, to sell, exchange, lend,
pledge, mortgage, hypothecate, write options on and lease any or all of the
Trust Property.
-15-
16
G. To act as a distributor of Shares and as
underwriter of, or broker or dealer in, securities or other property.
H. 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.
I. To exercise powers and rights of subscription
or otherwise which in any manner arise out of ownership of securities.
J. To hold any security or property in a form
not indicating any trust, whether in bearer, unregistered or other negotiable
form, or in the name of the Trustees or of the Trust or in the name of a
custodian, sub-custodian or other depositary or a nominee or nominees or
otherwise.
K. To consent to or participate in any plan for
the reorganization, consolidation or merger of any corporation or issuer, any
security of which is or was held in the Trust; and 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.
L. To join with other security holders in acting
through a committee, depositary, voting trustee or otherwise, and in that
connection to deposit any security with, or transfer any security to, any such
committee, depositary or trustee, and to delegate to them such power and
authority with relation to any security (whether or not so deposited or
transferred) as the Trustees shall deem proper, and to agree to pay, and to
pay, such portion of the expenses and compensation of such committee,
depositary or trustee as the Trustees shall deem proper.
M. To enter into joint ventures, general or
limited partnerships and any other combinations or associations.
N. To enter into contracts of any kind and
description.
O. To collect all property due to the Trust, to
pay all claims, including taxes, against the assets belonging to the Trust, to
prosecute, defend, 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, to foreclose any security interest securing any
-16-
17
obligations by virtue of which any property is owed to the Trust, and to enter
into releases, agreements and other instruments.
P. To retain and employ any Person or Persons to
serve on behalf of the Trust as investment adviser, administrator, transfer
agent, custodian, underwriter, distributor or in such other capacities as they
consider desirable and to delegate such power and authority as they consider
desirable to any such Person or Persons.
Q. To indemnify any person with whom the Trust
has dealings.
R. To purchase and pay for entirely out of Trust
Property such insurance as they may deem necessary or appropriate for the
conduct of the business, including without limitation, insurance policies
insuring the Trust Property and payment of distributions and principal on its
portfolio investments, and insurance policies insuring the Shareholders,
Trustees, officers, employees, agents, investment advisers or managers,
principal underwriters, or independent contractors of the Trust individually
against all claims and liabilities of every nature arising by reason of
holding, being or having held any such office or position, or by reason of any
action alleged to have been taken or omitted by any such person as Shareholder,
Trustee, officer, employee, agent, investment adviser or manager, principal
underwriter, or independent contractor, including any action taken or omitted
that may be determined to constitute negligence, whether or not the Trust would
have the power to indemnify such Person against such liability.
S. To engage in and to prosecute, defend,
compromise, abandon, or adjust, by arbitration or otherwise, any actions,
suits, proceedings, disputes, claims, and demands relating to the Trust or the
Trust Property, and, out of the Trust Property, to pay or to satisfy any debts,
claims or expenses incurred in connection therewith, including those of
litigation, and such power shall include without limitation the power of the
Trustees or any appropriate committee thereof, in the exercise of their or its
good faith business judgment, consenting to dismiss any action, suit,
proceeding, dispute, claims, or demand, derivative or otherwise, brought by any
person, including a Shareholder in such Shareholder's own name or in the name
of the Trust, whether or not the Trust or any of the Trustees may be named
individually therein or the subject matter arises by reason of business for or
on behalf of the Trust.
T. To establish pension, profit sharing, Share
purchase, and other retirement, incentive and benefit plans for any Trustees,
officers, employees and agents of the Trust.
-17-
18
U. To determine and change the fiscal year of
the Trust and the method by which its accounts shall be kept.
V. To establish in their absolute discretion in
accordance with the provisions of applicable law the basis or method for
determining the value of the assets belonging to any class or classes of
Shares, the value of the liabilities belonging to any class or classes of
Shares, the allocation of any assets or liabilities to any class or classes of
Shares, the net asset value of any class of Shares, the times at which Shares
of any class shall be deemed to be outstanding or no longer outstanding and the
net asset value of each Share of any class for purposes of sales, redemptions,
repurchases of Shares or otherwise.
W. To determine in accordance with generally
accepted accounting principles and practices what constitutes net profits or
net earnings, and to determine what accounting periods shall be used by the
Trust for any purpose, whether annual or any other period, including daily; to
set apart out of the assets belonging to any class or classes of Shares such
reserves of funds for such purposes as it shall determine and to abolish the
same; to declare and pay any dividends and distributions to any class of Shares
in cash, securities or other property from any assets legally available
therefor, at such intervals (which may be as frequently as daily) or on such
other periodic basis, as it shall determine; to declare such dividends or
distributions by means of a formula or other method of determination, at
meetings held less frequently than the frequency of the effectiveness of such
declaration; to establish payment dates for dividends or any other
distributions on any basis, including dates occurring less frequently than the
effectiveness of declarations thereof; and to provide for the payment of
declared dividends on a date earlier or later than the specified payment date
in the case of Shareholders redeeming their entire ownership of Shares of any
class.
X. To engage in any other lawful act or activity
in which a Massachusetts trust with transferable Shares or a corporation
organized under the Massachusetts Business Corporation Law may engage.
No one dealing with the Trustees shall be under any obligation
to make any inquiry concerning the authority of the Trustees, or to see to the
application of any payments made or property transferred to the Trustees or
upon their order.
6.8 Trustees and Representatives as Shareholders. Any
Trustee, representative or other agent of the Trust may acquire, own and
dispose of Shares of the Trust to the same extent as if he were not a Trustee,
representative or agent; and the Trust may issue and sell or cause to be issued
and sold Shares of the Trust
-18-
19
to, and may buy such Shares from, any person with which such Trustee,
representative or agent is affiliated subject only to the general limitations
herein contained as to the sale and purchase of such Shares; all subject to any
restrictions which may be contained in the Regulations.
6.9 Expenses; Trustee Reimbursement. The Trustees shall
have the power to incur an to pay (or shall be reimbursed) from the Trust
Property all expenses and disbursements of the Trust, including, without
limitation, interest expense, compensation payable to Trustees and
representatives of the Trust, taxes, fees and commissions of every kind
incurred in connection with the affairs of the Trust, expenses of issue,
repurchase and redemption of Shares, expenses of registering and qualifying the
Trust and its Shares under Federal and State securities laws and regulations,
charges of custodians, transfer agents, investment advisers, administrators and
registrars, expenses in obtaining securities prices for valuation purposes,
expenses of preparing and printing and distributing prospectuses, auditing and
legal expenses, expenses of reports to Shareholders, expenses of meetings of
Shareholders and proxy solicitations therefor, insurance expense, association
membership dues and such non-recurring items as may arise, including costs and
expenses of litigation to which the Trust is a party, and for all losses and
liabilities by them incurred in administering the Trust, provided that
expenses, disbursements, losses and liabilities incurred in connection with
classes of Shares having the same alphabetical designation or in connection
with the management of the assets belonging to such classes shall be payable
solely out of the assets belonging to such classes, and provided further that
the Trustees shall have a lien on the Trust Property prior to any rights or
interests of the Shareholders thereto for the payment of any expenses,
disbursements, losses and liabilities of the Trust.
6.10 Power to Carry Out Trust's Purposes; Presumptions.
The Trustees shall have power to carry out any and all acts consistent with the
Trust's purposes through branches and offices both within and without the
Commonwealth of Massachusetts, in any and all states of the United States of
America, in the District of Columbia, and in any and all commonwealths,
territories, dependencies, possessions, agencies or instrumentalities of the
United States of America and of foreign governments, and to do all such other
things and execute all such instruments as they deem necessary, proper or
desirable in order to promote the interests of the Trust although such things
are not herein specifically mentioned. 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, the presumption shall be in
favor of a grant of power to the Trustees. The enumeration of any specific
power herein shall not be construed as limiting the aforesaid power. The
Trustees shall
-19-
20
not be required to obtain any court order to deal with the Trust Property.
6.11 Determinations by Trustees. Any determination made
in good faith and, so far as accounting matters are involved in accordance with
generally accepted accounting principles, by or pursuant to the direction of
the Trustees as to the amount and value of assets, obligations or liabilities
of the Trust or any class of Shares, as to the amount of net income of the
Trust or any class of Shares from dividends and interest for any period or
amounts at any time legally available for the payment of dividends, as to the
amount of any reserves or charges set up and the propriety thereof, as to the
time of or purpose for creating reserves or as to the use, alteration or
cancellation of any reserves or charges (whether or not any obligation or
liability for which such reserves or charges shall have been created shall have
been paid or discharged or shall be then or thereafter required to be paid or
discharged), as to the value of any security owned by the Trust or any class of
Shares, as to the allocation of any assets or liabilities to a class or classes
of Shares, as to the times at which Shares of any class shall be deemed to be
outstanding or no longer outstanding, or as to any other matters relating to
the issuance, sale, redemption or other acquisition or disposition of
securities or Shares, and any reasonable determination made in good faith by
the Trustees as to whether any transaction constitutes a purchase of securities
on "margin," a sale of securities "short," or any underwriting of the sale of,
or a participation in any underwriting or selling group in connection with the
public distribution of, any securities, shall be final and conclusive, and
shall be binding upon the Trust and all Shareholders, past, present and future,
and Shares are issued and sold on the condition and understanding, evidenced by
the purchase of Shares or acceptance of Share certificates, that any and all
such determinations shall be binding as aforesaid.
6.12 Service in other Capacities. Any Trustee,
representative, employee or agent of the Trust, including any investment
adviser, transfer agent, administrator, distributor, custodian or underwriter
for the Trust, may serve in any other capacity on his or its own behalf or on
behalf of others, and may engage in other business activities in addition to
his or its services on behalf of the Trust, provided that such other activities
do not materially interfere with the performance of his or its duties for or on
behalf of the Trust.
-20-
21
VII.
AGREEMENTS WITH INVESTMENT ADVISER,
PRINCIPAL UNDERWRITER, ADMINISTRATOR,
TRANSFER AGENT, CUSTODIAN AND OTHERS
7.1 Investment Adviser. The Trustees may, on such terms
and conditions as they may in their discretion determine, enter into a written
investment advisory agreement or agreements with any Person or Persons
providing for portfolio management, investment advisory, statistical and
research facilities and other services pertaining to the assets belonging to
one or more classes of Shares. Notwithstanding any other provision hereof, the
Trustees may authorize such an investment adviser (subject to such general or
specific instructions as the Trustees may adopt) to effect purchases, sales or
exchanges of portfolio securities of such class(es) on behalf of the Trustees
and to determine the net asset value and net income of such class(es) or may
authorize any representative or Trustee to effect such purchases, sales or
exchanges pursuant to the recommendations of such investment adviser (all
without further action by the Trustees). Any such purchases, sales and
exchanges so affected shall be deemed to have been authorized by all of the
Trustees.
7.2 Administrator. The Trustees may, on such terms and
conditions as they may in their discretion determine, enter into one or more
agreements with any Person or Persons providing for administrative services to
one or more classes of Shares, including assistance in supervising the affairs
of such class(es) and performance of administrative, clerical and other
services considered desirable by the Trustees.
7.3 Principal Underwriter. The Trustees may, on such
terms and conditions as they may in their discretion determine, enter into one
or more distribution agreements with any Person or Persons providing for sale
of Shares of one or more classes at a price at least equal to the net asset
value per Share of such class(es) and providing for sale of the Shares of such
class(es) pursuant to arrangements by which the Trust may either agree to sell
the Shares of such class(es) to the other party to the agreement or appoint
such other party its sales agent for such Shares. Such agreement(s) may also
provide for the repurchase of Shares of such class(es) by such other party as
principal or as agent of the Trust, and may authorize the other party to enter
into agreements with others for the purpose of the distribution or repurchase
of Shares of such class(es).
7.4 Transfer Agent. The Trustees may, on such terms and
conditions as they may in their discretion determine, enter into one or more
agreements with any Person or Persons providing for transfer agency and other
services to Shareholders of any class.
-21-
22
7.5 Custodian. The Trustees may, on such terms and
conditions as they may in their discretion determine, enter into one or more
agreements with any Person or Persons providing for the custody and safekeeping
of the property of the Trust or any class of Shares.
7.6 Service and Distribution Plans. The Trustees may, on
such terms and conditions as they may in their discretion determine, adopt one
or more plans pursuant to which Persons may be compensated directly or
indirectly by the Trust for Shareholder servicing, administration or
distribution with respect to one or more classes of Shares, including without
limitation plans subject to Rule 12b-1 under the Act, and the Trustees may
enter into agreements pursuant to such plans.
7.7 Parties to Agreements. The same Person may be
employed in multiple capacities under Sections 7.1 through 7.6 of this Article
VII and may receive compensation in as many capacities as such Person serves.
The Trustees may enter into any agreement of the character described in this
Article VII, or any other agreement necessary or appropriate to the conduct of
the business of the Trust or any class of Shares, with any Person, including
any Person in which any Trustee, representative, employee or Shareholder of the
Trust may be interested, and no such agreement shall be invalidated or rendered
voidable by reason of the existence of any such relationship, nor shall any
Person holding such relationship be liable by reason of such relationship for
any loss or expense to the Trust under or by reason of said agreement or
accountable for any profit realized directly or indirectly therefrom.
VIII.
SHAREHOLDERS' VOTING POWERS AND MEETINGS
8.1 Voting Powers. The Shareholders shall have power to
vote (a) for the election of Trustees as provided in Section 6.2 hereof, (b) to
the same extent as the shareholders of a Massachusetts business corporation
when considering whether a court action, proceeding or claim should or should
not be brought or maintained derivatively or as a class action on behalf of the
Trust or the Shareholders, (c) with respect to any of the matters and to the
extent provided in Article x hereof, (d) with respect to such additional
matters relating to the Trust as may be required by law, by this Declaration of
Trust, by the Regulations of the Trust, by any requirement applicable to or
agreement of the Trust, or as the Trustees may consider desirable. Every
Shareholder of record shall have the right to one vote for every whole Share
(other than Shares held in the treasury of the Trust) standing in his name on
the books of the Trust, and to a proportional fractional vote for any
fractional Share, as to any
-22-
23
matter on which the Shareholder is entitled to vote. There shall be no
cumulative voting. Shares may be voted in person or by proxy. Until Shares
are issued, the Trustees may exercise all rights of Shareholders and may take
any action required or permitted to be taken by Shareholders by law, this
Declaration of Trust or the Regulations.
8.2 Meetings. Meetings of Shareholders may be called by
the Trustees as provided in the Regulations and shall be called by the Trustees
upon the written request of Shareholders owning at least ten percent (10%) of
the outstanding shares entitled to vote.
8.3 Quorum and Required Vote. The presence, in person or
by proxy, of Shareholders entitled to cast at least a majority of the votes
which all Shareholders are entitled to cast on the particular matter shall
constitute a quorum for the purpose of considering such matter. Action may be
taken on all matters for which a quorum exists, irrespective of the absence of
a quorum on other matters. If a meeting cannot be organized with respect to a
particular matter because a quorum for that matter has not attended, those
present and entitled to vote on such matter may adjourn the meeting to such
reasonable time and place as they may determine.
On any matter submitted to a vote of Shareholders, Shares with
different alphabetical class designations that are then issued and outstanding
and entitled to vote shall be voted in the aggregate and not by class except:
(1) as otherwise required by applicable law or permitted by the Board of
Trustees of the Trust, or (2) when the matter, as conclusively determined by
the Trustees, affects only the interests of the Shareholders of a class or
classes with a particular alphabetical designation (in which case only
Shareholders of the affected class or classes shall be entitled to vote
thereon).
Each share of classes having the same alphabetical designation
shall vote together in the aggregate and not by class on all matters submitted
to a vote of the Shareholders of such classes, except that:
(1) on any matter that pertains to the
agreements or expenses and liabilities described in subsection B(3)(a) of
Section 5.1 hereof (or to any plan or other document adopted by the Trust
relating to said agreements, expenses or liabilities) and is submitted to a
vote of Shareholders of the Trust, only the particular class of Shares
specified therein shall be entitled to vote, except that: (i) if said matter
affects Shares in the Trust other than such class of Shares, such other
affected Shares in the Trust shall also be entitled to vote, and in such case
the particular class of Shares so specified shall be voted in the aggregate
together with such
-23-
24
other affected Shares and not by class except where otherwise required by law
or permitted by the Board of Trustees of the Trust; and (ii) if said matter
does not affect the particular class of Shares specified therein, said class of
Shares shall not be entitled to vote (except where required by law or permitted
by the Board of Trustees) even though the matter is submitted to a vote of the
holders of Shares in the Trust other than Shares of such class; and
(2) on any matter that pertains to the
agreements or expenses and liabilities described in subsection B(3)(b) of
Section 5.1 hereof (or any plan or other document adopted by the Trust relating
to said agreements, expenses or liabilities) and is submitted to a vote of
Shareholders of the Trust, the particular class of Shares specified therein
shall not be entitled to vote, except where otherwise required by law or
permitted by the Board of Trustees of the Trust, and except that if said matter
affects such class of Shares, such class of Shares shall be entitled to vote,
and in such case shall be voted in the aggregate together with all other Shares
in the Trust voting on the matter and not by class except where otherwise
required by law or permitted by the Board of Trustees.
Subject to any applicable requirements of law or of this
Declaration of Trust or the Regulations: (a) the acts, at any duly organized
meeting, of the Shareholders present, in person or by proxy, entitled to cast
at least a majority of the votes which all Shareholders present are entitled to
cast on the particular matter shall be the acts of the Shareholders with
respect to that matter; and (b) in the election of Trustees, a plurality of the
Shares voting shall elect a Trustee.
8.4 Shareholder Action by Written Consent. Any action
which may be taken by Shareholders may be taken without a meeting if not less
than a majority of the Shares entitled to vote on the matter consent to the
action in writing and the 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.
8.5 Code of Regulations. The Regulations may include
further provisions not inconsistent with this Declaration of Trust for meetings
of Shareholders, votes, record dates, notices of meetings and related matters.
IX.
LIMITATIONS OF LIABILITY AND INDEMNIFICATION
9.1 Liabilities of Classes. Liabilities belonging to
classes of Shares with the same alphabetical designation,
-24-
25
including, without limitation, expenses, fees, charges, taxes, and liabilities
incurred or arising in connection with such classes, or in connection with the
management thereof, shall be paid only from the assets belonging to such
classes.
9.2 Limitation of Trustee Liability. Every act or thing
done or omitted, and every power exercised or obligation incurred by the
Trustees or any of them in the administration of this Trust or in connection
with any affairs, property or concerns of the Trust, whether ostensibly in
their own names or in their Trust capacity, shall be done, omitted, exercised
or incurred by them as Trustees and not as individuals. Every person
contracting or dealing with the Trustees or having any debt, claim or judgment
against them or any of them shall look only to the funds and property of the
Trust for payment or satisfaction. No Trustee or Trustees of the Trust shall
ever be personally liable for or on account of any contract, debt, tort, claim,
damage, judgment or decree arising out of or connected with the administration
or preservation of the Trust Property or the conduct of any of the affairs of
the Trust. Every note, bond, contract, order or other undertaking issued by
the Trust or the Trustees relating to the Trust, and stationery used by the
Trust shall include the notice set forth in Section 9.5 of this Article IX (but
the omission thereof shall not be construed as a waiver of the foregoing
provision, and shall not render the Trustees personally liable).
It is the intention of this Section 9.2 that no Trustee shall
be subject to any personal liability whatsoever to any person for any action or
failure to act (including without limitation the failure to compel in any way
any former or acting Trustee to redress any breach of trust) except that
nothing in this Declaration of Trust shall protect any Trustee from any
liability to the Trust or its Shareholders to which he would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence in the
performance of his duties, or by reason of reckless disregard of his
obligations and duties as Trustee; and that all persons shall look solely to
the Trust Property belonging to a class of Shares for satisfaction of claims of
any nature arising in connection with the affairs of such class of the Trust.
9.3 Indemnification of Trustees, Representatives and
Employees. The Trust shall indemnify each of its Trustees against all
liabilities and expenses (including amounts paid in satisfaction of judgments,
in compromise, as fines and penalties, and as counsel fees) reasonably incurred
by him in connection with the defense or disposition of any action, suit or
other proceeding, whether civil or criminal, in which he may be involved or
with which he may be threatened, while as a Trustee or thereafter, by reason of
his being or having been such a Trustee except with respect to any matter as to
which he shall
-25-
26
have been adjudicated to have acted in bad faith, willful misfeasance, gross
negligence or reckless disregard of his duties, provided that as to any matter
disposed of by a compromise payment by such person, pursuant to a consent
decree or otherwise, no indemnification either for said payment or for any
other expenses shall be provided unless the Trust shall have received a written
opinion from independent legal counsel approved by the Trustees to the effect
that if either the matter of willful misfeasance, gross negligence or reckless
disregard of duty, or the matter of bad faith had been adjudicated, it would in
the opinion of such counsel have been adjudicated in favor of such person. The
rights accruing to any person under these provisions shall not exclude any
other right to which he may be lawfully entitled, provided that no person may
satisfy any right of indemnity or reimbursement hereunder except out of the
property of the Trust. The Trustees may make advance payments in connection
with the indemnification under this Section 9.3, provided that the indemnified
person shall have given a written undertaking to reimburse the Trust in the
event it is subsequently determined that he is not entitled to such
indemnification.
The Trustees shall indemnify representatives and employees of
the Trust to the same extent that Trustees are entitled to indemnification
pursuant to this Section 9.3.
9.4 Reliance on Experts, etc. Each Trustee and
representative of the Trust shall, in the performance of his duties, be fully
and completely justified and protected with regard to any act or any failure to
act resulting from reliance in good faith upon the books of account or other
records of the Trust, upon an opinion of counsel satisfactory to the Trust, or
upon reports made to the Trust by any of its representatives or employees or by
the investment adviser, the principal underwriter, selected dealers,
accountants, appraisers or other experts or consultants selected with
reasonable care by the Trustees or representatives of the Trust, regardless of
whether such counsel or expert may also be a Trustee.
9.5 Limitation of Shareholder Liability. Shareholders
shall not be subject to any personal liability in connection with the assets of
the Trust for the acts or obligations of the Trust. The Trustees shall have no
power to bind any Shareholder personally or 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 by way of subscription to
any Shares or otherwise. Every obligation, contract, instrument, certificate
for Shares or any other security of any class of the Trust or undertaking, and
every other act whatsoever executed in connection with the Trust or any class
of Shares shall be conclusively presumed to have been executed or done by the
executors thereof only in their
-26-
27
capacities as Trustees under the Declaration of Trust or in their capacity as
officers, employees or agents of the Trust and not individually. Every note,
bond, contract, order or other undertaking issued by or on behalf of the Trust
or the Trustees relating to the Trust or any class of Shares, and the
stationery used by the Trust, shall include a recitation limiting the
obligation represented thereby to the Trust and its assets (but the omission of
such a recitation shall not operate to bind any Shareholder), as follows:
"The names 'Conestoga Family of Funds' and 'Trustees
of Conestoga Family of Funds' refer respectively to
the Trust created and the Trustees, as trustees but
not individually or personally, acting from time to
time under a Declaration of Trust dated August 1,
1989 which is hereby referred to and a copy of which
is on file at the office of the State Secretary of
The Commonwealth of Massachusetts and at the
principal office of the Trust. The obligations of
'Conestoga Family of Funds' entered into in the name
or on behalf thereof by any of the Trustees,
representatives or agents are made not individually,
but in such capacities, and are not binding upon any
of the Trustees, Shareholders or representatives of
the Trust personally, but bind only the Trust
Property, and all persons dealing with any class of
shares of the Trust must look solely to the Trust
Property belonging to such class for the enforcement
of any claims against the Trust."
The rights accruing to a Shareholder under this Section 9.5
shall not exclude any other right to which such Shareholder may be lawfully
entitled, nor shall anything herein contained restrict the right of the Trust
to indemnify or reimburse a Shareholder in any appropriate situation even
though not specifically provided for herein, provided that a Shareholder of any
class of Shares shall be indemnified only from assets belonging to the classes
of Shares with the same alphabetical designation.
9.6 Indemnification of Shareholders. In case any
Shareholder or former Shareholder shall be held to be personally liable solely
by reason of his being or having been a Shareholder and not because of his acts
or omissions or for some other reason, the Shareholder or former Shareholder
(or his heirs, executors, administrators or other legal representatives or, in
the case of a corporation or other entity, its corporate or other general
successor) shall be entitled out of the assets belonging to the classes of
Shares with the same alphabetical designation as that of the Shares owned by
such Shareholder to be held
-27-
28
harmless from and indemnified against all loss and expense arising from such
liability. The Trust shall, upon request by the Shareholder, assume the
defense of any claim made against any Shareholder for any act or obligations of
the Trust and satisfy any judgment thereon from such assets.
X.
MISCELLANEOUS
10.1 Trust Not a Partnership. It is hereby expressly
declared that a Massachusetts trust with transferable Shares and not a
partnership, joint venture, corporation, joint stock company or any form of
legal relationship other than a trust is created hereby. Nothing herein shall
be construed to make the Shareholders, either by themselves or with the
Trustees, partners or members of a joint stock association. No Trustee
hereunder shall have any power to bind personally either a representative of
the Trust or any Shareholder. 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 Trust for payment under such credit, contract or claim; and
neither the Shareholders nor the Trustees, whether past, present or future,
shall be personally liable therefor.
10.2 No Bond or Surety. The Trustees shall not be
required to give any bond as such, nor any surety if a bond is required.
10.3 Duration of Trust. This Trust shall continue without
limitation of time, provided that the Trust or any class of Shares may be
terminated at any time in accordance with the provisions of this Declaration of
Trust and applicable law.
10.4 Merger, Consolidation and Sale of Assets. The Trust
may merge into or consolidate with any other corporation, association, trust or
other organization or may sell, lease or exchange all or substantially all of
the Trust Property, including its good will, upon such terms and conditions and
for such consideration when and as authorized by vote or written consent of the
Trustees and approved by the affirmative vote of the holders of not less than a
majority of the Shares outstanding and entitled to vote, voting in the
aggregate and not by class except to the extent that applicable law may require
voting by class, or by an instrument or instruments in writing without a
meeting consented to by the holders of not less than a majority of such Shares,
voting in the aggregate and not by class except to the extent that applicable
law may require voting by class.
10.5 Incorporation. With the approval of the holders of a
majority of the outstanding Shares, voting in the aggregate
-28-
29
and not by class except to the extent that applicable law may require voting by
class, the Trustees may cause to be organized, or assist in organizing, a
corporation or corporations under the law of any jurisdiction, to carry on any
affairs in which the Trust shall directly or indirectly have any interest, and
to transfer the Trust Property to any such Person in exchange for any Shares or
securities thereof or otherwise, and to lend money, to subscribe for the Shares
or securities of, and enter into any contracts with any such Person in which
the Trust holds or is about to acquire securities or any other interest. The
Trustees may also cause a merger or consolidation between the Trust or any
successor thereto and any such Person if and to the extent permitted by law.
Nothing contained herein shall be construed as requiring approval of
Shareholders for the Trustees to organize or assist in organizing one or more
corporations, trusts, partnerships associations or the organizations and
selling, conveying or transferring a portion of the Trust Property to such
Person(s).
10.6 Filing of Copies, References, Headings. The original
instrument of this Declaration of Trust and of each amendment hereto shall be
filed with the State Secretary of the Commonwealth of Massachusetts as provided
by law and copies thereof shall be kept at the office of the Trust where they
may be inspected by any Shareholder. Each amendment so filed shall be
accompanied by a certificate signed and acknowledged by a Trustee or by the
Secretary or any Assistant Secretary of the Trust stating that such action was
duly taken in the manner provided herein, and unless such amendment or such
certificate sets forth some later time for the effectiveness of such amendment,
such amendment shall be effective upon its filing. A restated Declaration
Trust, integrating into a single instrument all of the provisions of the
Declaration of Trust that are then in effect and operative, may be executed
from time to time by a majority of the Trustees and shall, upon filing with the
State Secretary of the Commonwealth of Massachusetts, be conclusive evidence of
all amendments contained therein and may thereafter be referred to in lieu of
the initial Declaration of Trust and the various amendments thereto. Anyone
dealing with the Trust may rely on a certificate by a representative of the
Trust as to whether or not any such amendment hereto may have been made and as
to any matters in connection with the Trust hereunder, with the same effect as
if it were the original, and may rely on a copy certified by a representative
of the Trust to be a copy of this instrument or of any amendment thereto.
Headings are placed herein for convenience of reference only and, in the case
of any conflict, the text of this instrument, rather than the headings, shall
control. This instrument may be executed in any number of counterparts each of
which shall be deemed an original. All signatures to this instrument need not
appear on the same page.
-29-
30
10.7 Applicable Law. The Trust set forth in this
instrument is a trust made in the Commonwealth of Massachusetts and is to be
governed by and construed and administered according the laws of said
Commonwealth.
10.8 Provisions in Conflict With Law or Regulations.
A. No provision of this Declaration of Trust
shall be effective to:
(1) Require a waiver of compliance with
any provision of the Securities Act of 1933, as amended, or the Act, or of any
valid rule, regulation or order of the Securities and Exchange Commission
thereunder; or
(2) Protect or purport to protect any
Trustee or officer of the Trust against any liability to the Trust or its
Shareholders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office.
B. 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 Act, the regulated
investment company provisions of the Internal Revenue Code, Chapter 182 of the
General Laws of the Commonwealth of Massachusetts or with any other applicable
law or regulation, then in such event the conflicting provision shall be deemed
never to have constituted a part of this Declaration of Trust, provided 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.
C. 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.
10.9 Amendment of Declaration of Trust.
A. This Declaration of Trust may be amended upon
a resolution to that effect being adopted by the Trustees and approved by the
affirmative vote of the holders of not less than a majority of the outstanding
Shares, voting in the aggregate and not by class except to the extent that
applicable law may require voting by class.
-30-
31
B. Notwithstanding any other provision hereof,
until such time as a Registration Statement under the Securities Act of 1933,
as amended, covering the first public offering of securities of the Trust shall
have become effective, this Declaration of Trust may be terminated or amended
in any respect by the affirmative vote of a majority of the Trustees.
C. The Trustees may amend this Declaration of
Trust without a vote of Shareholders to change the name of the Trust or to cure
any error or ambiguity or if they deem it necessary to conform this Declaration
of Trust to the requirements of applicable state or federal laws or
regulations, including without limitation the requirements of the regulated
investment company provisions of the Internal Revenue Code, but the Trustees
shall not be liable for failing so to do.
D. Notwithstanding any other provision hereof,
this Declaration of Trust may not be amended in any manner whatsoever that
would impair the exemption from personal liability of the Trustees and
Shareholders of the Trust or that would permit an assessment upon any
Shareholder.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement and Declaration of Trust in the capacities indicated, this 1st day of
August, 1989.
s/ Xxxxx X. Xxxxx
----------------------------------
Xxxxx X. Xxxxx, Settlor
s/ Xxxxxx X. Xxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxx,
Initial Trustee
-31-
32
M A S S A C H U S E T T S
Suffolk, ss.:
On this 1st day of August, 1989, personally appeared before me
Xxxxx X. Xxxxx and Xxxxxx X. Xxxxxxx, each known to me and known to me to be
the individuals described in and who executed the foregoing Agreement and
Declaration of Trust, and each acknowledged the said Agreement and Declaration
of Trust to be his free act and deed.
s/ Xxxx Xxxxxx
----------------------------------
Notary Public
[NOTARIAL SEAL] My Commission Expires 9/7/95
------------------
-32-
