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Exhibit 99(a)(3)
KELMOORE STRATEGIC TRUST
AGREEMENT AND DECLARATION OF TRUST
NOVEMBER 30, 1998,
AS AMENDED
MARCH 22, 1999
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TABLE OF CONTENTS
Page
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ARTICLE I NAME AND DEFINITIONS 1
Section 1. Name 1
Section 2. Definitions 1
ARTICLE II THE TRUSTEES 3
Section 1. Management of the Trust 3
Section 2. Powers 3
Section 3. Certain Transactions 7
Section 4. Initial Trustees; Election and Number of Trustees 7
Section 5. Term of Office of Trustees 8
Section 6. Vacancies; Appointment of Trustees 8
Section 7. Temporary Vacancy or Absence 8
Section 8. Ownership of Trust Property 8
Section 9. Effect of Trustees Not Serving 9
Section 10. Trustees, etc. as Shareholders 9
ARTICLE III CONTRACTS WITH SERVICE PROVIDERS 9
Section 1. Underwriting Contracts 9
Section 2. Advisory or Management Contract 9
Section 3. Administration Agreement 10
Section 4. Service Agreement 10
Section 5. Transfer Agent 10
Section 6. Custodian 10
Section 7. Affiliations of Trustees or Officers, Etc. 11
ARTICLE IV COMPENSATION, LIMITATION OF LIABILITY
AND INDEMNIFICATION 11
Section 1. Compensation 11
Section 2. Limitation of Liability 11
Section 3. Indemnification 12
Section 4. Indemnification of Shareholders 13
Section 5. No Bond Required of Trustees 13
Section 6. No Duty of Investigation; Notice in
Trust Instruments, Etc. 13
Section 7. Reliance on Experts, Etc. 14
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ARTICLE V SERIES; CLASSES; SHARES 14
Section 1. Establishment of Series or Class 14
Section 2. Shares 15
Section 3. Investment in the Trust 15
Section 4. Assets and Liabilities of Series 16
Section 5. Ownership and Transfer of Shares 17
Section 6. Status of Shares; Limitation of Shareholder Liability 17
ARTICLE VI DISTRIBUTION AND REDEMPTIONS 18
Section 1. Distributions 18
Section 2. Redemptions 18
Section 3. Determination of Net Asset Value 19
Section 4. Suspension of Right of Redemption 19
Section 5. Repurchase by Agreement 19
ARTICLE VII SHAREHOLDERS' VOTING POWERS
AND MEETINGS 20
Section 1. Voting Powers 20
Section 2. Quorum; Required Vote 20
Section 3. Quorum; Required Vote 21
Section 4. Quorum; Required Vote 21
Section 5. Record Dates 21
Section 6. Additional Provisions 22
ARTICLE VIII EXPENSES OF THE TRUST AND SERIES 22
Section 1. Payment of Expenses by the Trust 22
Section 2. Payment of Expenses by Shareholders 22
ARTICLE IX MISCELLANEOUS 23
Section 1. Trust Not a Partnership 23
Section 2. Trustee Action 23
Section 3. Termination of the Trust 23
Section 4. Reorganization 24
Section 5. Declaration of Trust 24
Section 6. Applicable Law 25
Section 7 Amendments 25
Section 8 Derivative Actions 26
Section 9 Fiscal Year 26
Section 10 Severability 26
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KELMOORE STRATEGIC TRUST
AGREEMENT AND
DECLARATION OF TRUST
This AGREEMENT AND DECLARATION OF TRUST is made on November 30, 1998,
as amended March 22, 1999, by the undersigned Trustee (together with all other
persons from time to time duly elected, qualified and serving as Trustees in
accordance with the provisions of Article II hereof, the "Trustees");
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the Trust shall be held and managed in trust pursuant to this
Agreement and Declaration of Trust.
ARTICLE I
NAME AND DEFINITIONS
Section 1. Name. The name of the Trust created by this Agreement and Declaration
of Trust is "Kelmoore Strategic Trust".
Section 2. Definitions. Unless otherwise provided or required by the context:
(a) "Administrator" means the party, other than the Trust, to the contract
described in Article III, Section 3 hereof.
(b) "By-laws" means the By-laws of the Trust adopted by the Trustees, 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.
(c) "Class" means the class of Shares of a Series established pursuant to
Article V.
(d) "Commission," "Eligible Foreign Custodian," "Qualified Foreign Bank,"
"Interested Person" and "Principal Underwriter" have the meanings provided
in the 1940 Act. Except as such term may be otherwise defined by the
Trustees in conjunction with the establishment of any Series of Shares,
the term "Majority Shareholder Vote" shall have the same meaning as is
assigned to the term "vote of a majority of the outstanding voting
securities" in the 1940 Act.
(e) "Covered Person" means a person so defined in Article IV, Section 3.
(f) "Custodian" means any Person other than the Trust who has custody of any
Trust Property as required by Section 17(f) of the 1940 Act, but does not
include a system for the central handling of securities described in said
Section 17(f).
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(g) "Declaration" shall mean this Agreement and Declaration of Trust, as
amended or restated from time to time. Reference in this Declaration of
Trust to "Declaration," "hereof," "herein," and "hereunder" shall be
deemed to refer to this Declaration rather than exclusively to the article
or section in which such words appear.
(h) "Delaware Act" means Chapter 38 of Title 12 of the Delaware Code entitled
"Treatment of Delaware Business Trusts," as amended from time to time.
(i) "Fund Complex" has the meaning provided in Schedule 14A under the
Securities Exchange Act of 1934, as amended.
(j) "Distributor" means the party, other than the Trust, to the contract
described in Article III, Section 1 hereof.
(k) "His" shall include the feminine and neuter, as well as the masculine,
genders.
(l) "Interested Person" has the meaning provided under the Investment Company
Act of 1940, as amended.
(m) "Investment Adviser" means the party, other than the Trust, to the
contract described in Article III, Section 2 hereof.
(n) "Net Asset Value" means the net asset value of each Series or Class of the
Trust, determined as provided in Article VI, Section 3.
(o) "Person" means and includes individuals, corporations, partnerships,
trusts, associations, limited liability companies, joint ventures, estates
and other entities, and governments and agencies and political
subdivisions thereof, whether domestic or foreign.
(p) "Series" means a series of Shares established pursuant to Article V.
(q) "Shareholder" means a record owner of Outstanding Shares;
(r) "Shares" means the equal proportionate transferable units of interest into
which the beneficial interest of each Series or Class is divided from time
to time (including whole Shares and fractions of Shares). "Outstanding
Shares" means Shares shown in the books of the Trust or its transfer agent
as then issued and outstanding, but does not include Shares which have
been repurchased or redeemed by the Trust.
(s) "Transfer Agent" means any Person other than the Trust who maintains the
Shareholder records of the Trust, such as the list of Shareholders, the
number of Shares credited to each account, and the like.
(t) "Trust" means Kelmoore Strategic Trust established hereby, and reference
to the Trust, when applicable to one or more Series, refers to that
Series.
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(u) "Trustees" means the persons who have signed this Declaration of Trust and
all other persons who may from time to time be duly qualified and serving
as Trustees in accordance with Article II, in all cases so long as they
shall continue in office in accordance with the terms hereof.
(v) "Trust Property" means any and all property, real or personal, tangible or
intangible, which is owned or held by or for the Trust or any Series or
the Trustees on behalf of the Trust or any Series.
(w) "1940 Act" means the Investment Company Act of 1940 and the Rules and
Regulations thereunder, all as amended from time to time.
ARTICLE II
THE TRUSTEES
Section 1. Management of the Trust. The business and affairs of the Trust shall
be managed by or under the direction of the Trustees, and they shall have all
powers necessary or desirable to carry out that responsibility. The Trustees may
execute all instruments and take all action they deem necessary or desirable to
promote the interests of the Trust. Any determination made by the Trustees in
good faith as to what is in the interests of the Trust shall be conclusive. In
construing the provisions of this Declaration, the presumption shall be in favor
of a grant of power to the Trustees.
Section 2. Powers. The Trustees in all instances shall act as principals, free
of the control of the Shareholders. The Trustees shall have full power and
authority to take or refrain from taking any action and to execute any contracts
and instruments that they may consider necessary or desirable in the management
of the Trust. The Trustees shall not in any way be bound or limited by current
or future laws or customs applicable to trust investments, but shall have full
power and authority to make any investments which they, in their sole
discretion, deem proper to accomplish the purposes of the Trust. The Trustees
may exercise all of their powers without recourse to any court or other
authority. Subject to any applicable limitation herein or in the By-laws or
resolutions of the Trust, the Trustees shall have power and authority, without
limitation:
(a) To operate as and carry on the business of an investment company, and
exercise all the powers necessary and appropriate to the conduct of such
operations.
(b) To invest in, hold for investment, or reinvest in, cash; securities,
including common, preferred and preference stocks; warrants; subscription
rights; profit-sharing interests or participations and all other contracts
for or evidence of equity interests; bonds, debentures, bills, time notes
and all other evidences of indebtedness; negotiable or non-negotiable
instruments; government securities, including securities of any state,
municipality or other political subdivision thereof, or any governmental
or quasi-governmental agency or
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instrumentality; and money market instruments, including bank certificates
of deposit, finance paper, commercial paper, bankers' acceptances and all
kinds of repurchase agreements, of any corporation, company, trust,
association, firm or other business organization however established, and
of any country, state, municipality or other political subdivision, or any
governmental or quasi-governmental agency or instrumentality; or any other
security, property or instrument in which the Trust or any of its Series
shall be authorized to invest.
(c) To acquire (by purchase, subscription or otherwise), to hold, to trade in
and deal in, to acquire any rights or options to purchase or sell, to sell
or otherwise dispose of, to lend and to pledge any such securities, to
enter into repurchase agreements, reverse repurchase agreements, firm
commitment agreements and forward foreign currency exchange contracts, to
purchase and sell options on securities, securities indices, currency and
other financial assets, futures contracts, options on futures contracts,
swaps, collars, caps, floors and swaptions of all descriptions and to
engage in all types of hedging and risk-management transactions.
(d) To exercise all rights, powers and privileges of ownership or interest in
all securities and repurchase agreements included in the Trust Property,
including the right to vote thereon and otherwise act with respect thereto
and to do all acts for the preservation, protection, improvement and
enhancement in value of all such securities and repurchase agreements.
(e) To acquire (by purchase, lease or otherwise) and to hold, use, maintain,
develop and dispose of (by sale or otherwise) any property, real or
personal, including cash or foreign currency, and any interest therein.
(f) To borrow money or other property in the name of the Trust exclusively for
Trust purposes and in this connection issue notes or other evidence of
indebtedness; to secure borrowings by mortgaging, pledging or otherwise
subjecting as security the Trust Property; and to endorse, guarantee, or
undertake the performance of any obligation or engagement of any other
Person and to lend Trust Property.
(g) To aid by further investment any corporation, company, trust, association
or firm, any obligation of or interest in which is included in the Trust
Property or in the affairs of which the Trustees have any direct or
indirect interest; to do all acts and things designed to protect,
preserve, improve or enhance the value of such obligation or interest; and
to guarantee or become surety on any or all of the contracts, stocks,
bonds, notes, debentures and other obligations of any such corporation,
company, trust, association or firm.
(h) To adopt By-laws not inconsistent with this Declaration providing for the
conduct of the business of the Trust and to amend and repeal them to the
extent such right is not reserved to the Shareholders.
(i) To elect and remove such officers and appoint and terminate such agents as
they deem appropriate.
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(j) To employ as custodian of any assets of the Trust, subject to any
provisions herein or in the By-laws, one or more banks, trust companies or
companies that are members of a national securities exchange, or other
entities permitted by the Commission to serve as such.
(k) To retain one or more transfer agents and shareholder servicing agents, or
both.
(l) To provide for the distribution of Shares either through a Distributor as
provided herein or by the Trust itself, or both, or pursuant to a
distribution plan of any kind.
(m) To set record dates in the manner provided for herein or in the By-laws.
(n) To delegate such authority as they consider desirable to any officers of
the Trust and to any agent, independent contractor, manager, investment
adviser, custodian or underwriter.
(o) To hold any security or other property (i) in a form not indicating any
trust, whether in bearer, book entry, unregistered or other negotiable
form, or (ii) either in the Trust's or Trustees' own name or in the name
of a custodian or a nominee or nominees, subject to safeguards according
to the usual practice of business trusts or investment companies.
(p) To establish separate and distinct Series with separately defined
investment objectives and policies and distinct investment purposes, and
with separate Shares representing beneficial interests in such Series, and
to establish separate Classes, all in accordance with the provisions of
Article V.
(q) To the full extent permitted by Section 3804 of the Delaware Act, to
allocate assets, liabilities and expenses of the Trust to a particular
Series and assets, liabilities and expenses to a particular Class or to
apportion the same between or among two or more Series or Classes,
provided that any liabilities or expenses incurred by a particular Series
or Class shall be payable solely out of the assets belonging to that
Series or Class as provided for in Article V, Section 4.
(r) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or concern whose securities are
held by the Trust; to consent to any contract, lease, mortgage, purchase,
or sale of property by such corporation or concern; and to pay calls or
subscriptions with respect to any security held in the Trust.
(s) 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.
(t) To make distributions of income, capital gains, returns of capital (if
any) and redemption proceeds to Shareholders in the manner hereinafter
provided for.
(u) To establish committees for such purposes, with such membership, and with
such responsibilities as the Trustees may consider proper, including a
committee consisting of
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fewer than all of the Trustees then in office, which may act for and bind
the Trustees and the Trust with respect to the institution, prosecution,
dismissal, settlement, review or investigation of any legal action, suit
or proceeding, pending or threatened.
(v) To issue, sell, repurchase, redeem, cancel, retire, acquire, hold, resell,
reissue, dispose of and otherwise deal in Shares; to establish terms and
conditions regarding the issuance, sale, repurchase, redemption,
cancellation, retirement, acquisition, holding, resale, reissuance,
disposition of or dealing in Shares; and, subject to Articles V and VI, to
apply to any such repurchase, redemption, retirement, cancellation or
acquisition of Shares any funds or property of the Trust or of the
particular Series with respect to which such Shares are issued.
(w) 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 all without any requirement of
approval by Shareholders. 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.
(x) To carry on any other business in connection with or incidental to any of
the foregoing powers, to do everything necessary or desirable to
accomplish any purpose or to further any of the foregoing powers, and to
take every other action incidental to the foregoing business or purposes,
objects or powers.
(y) To sell or exchange any or all of the assets of the Trust, subject to
Article IX, Section 4.
(z) To enter into joint ventures, partnerships and other combinations and
associations.
(aa) 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;
(bb) 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, subject to applicable law and any restrictions
set forth in the By-laws, insurance policies insuring the Shareholders,
Trustees, officers, employees, agents, investment advisers, Distributors,
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 adviser, Distributor, or
independent contractor, including any action taken
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or omitted that may be determined to constitute negligence, whether or not
the Trust would have the power to indemnify such Person against liability;
(cc) To adopt, establish and carry out pension, profit-sharing, share bonus,
share purchase, savings, thrift and other retirement, incentive and
benefit plans and trusts, including the purchasing of life insurance and
annuity contracts as a means of providing such retirement and other
benefits, for any or all of the Trustees, officers, employees and agents
of the Trust;
(dd) To enter into contracts of any kind and description;
(ee) To interpret the investment policies, practices or limitations of any
Series or Class; and
(ff) To guarantee indebtedness and contractual obligations of others.
The clauses above shall be construed as objects and powers, and the enumeration
of specific powers shall not limit in any way the general powers of the
Trustees. Any action by one or more of the Trustees in their capacity as such
hereunder shall be deemed an action on behalf of the Trust or the applicable
Series, and not an action in an individual capacity. 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. In construing this
Declaration, the presumption shall be in favor of a grant of power to the
Trustees.
Section 3. Certain Transactions. Except as prohibited by applicable law, the
Trustees may, on behalf of the Trust, buy any securities from or sell any
securities to, or lend any assets of the Trust to, any Trustee or officer of the
Trust or any firm of which any such Trustee or officer is a member acting as
principal, or have any such dealings with any investment adviser, administrator,
distributor or transfer agent for the Trust or with any Interested Person of
such person. The Trust may employ any such person or entity in which such person
is an Interested Person, as broker, legal counsel, registrar, investment
adviser, administrator, distributor, transfer agent, dividend disbursing agent,
custodian or in any other capacity upon customary terms.
Section 4. Initial Trustee; Number of Trustees. The initial Trustee shall be the
person signing this Declaration. The number of Trustees shall be fixed from time
to time by a majority of the Trustees; provided, that there shall be at least
one (1) Trustee.
Section 5. Term of Office of Trustees. Each Trustee shall hold office for life
or until his successor is duly elected and qualified or the Trust terminates;
except that (a) any Trustee may resign by delivering to the other Trustees or to
any Trust officer a written resignation effective upon such delivery or a later
date specified therein; (b) any Trustee may be removed with or without cause at
any time by a written instrument signed by at least a majority of the then
Trustees, specifying the effective date of removal; (c) any Trustee who requests
to be retired, who has reached any mandatory retirement age established by the
Trustees, or who is declared bankrupt or has become physically or mentally
incapacitated or is otherwise unable to serve, may
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be retired by a written instrument signed by a majority of the other Trustees,
specifying the effective date of retirement; and (d) any Trustee may be removed
at any meeting of the Shareholders by a vote of at least two-thirds of the
Outstanding Shares.
Section 6. Vacancies; Appointment of Trustees. Whenever a vacancy shall exist in
the Board of Trustees, regardless of the reason for such vacancy, the remaining
Trustees shall appoint any person as they determine in their sole discretion to
fill that vacancy, consistent with the limitations under the 1940 Act. Such
appointment shall be made by a written instrument signed by a majority of the
Trustees or by a resolution of the Trustees, duly adopted and recorded in the
records of the Trust, specifying the effective date of the appointment. The
Trustees may appoint a new Trustee as provided above in anticipation of a
vacancy expected to occur because of the retirement, resignation or removal of a
Trustee, or an increase in the number of Trustees, provided that such
appointment shall become effective only at or after the expected vacancy occurs
and provided further that any new Trustee shall have reached the age of majority
in the state in which he resides. As soon as any such Trustee has accepted his
appointment, the trust estate shall vest in the new Trustee, together with the
continuing Trustees, without any further act or conveyance, and he shall be
deemed a Trustee hereunder. Whenever a vacancy in the number of Trustees shall
occur, until such vacancy is filled as provided in this Article II, 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 the
Declaration.
Section 7. Temporary Vacancy or Absence. Whenever a vacancy in the Board of
Trustees shall occur, until such vacancy is filled, or while any Trustee is
absent from his domicile (unless that Trustee has made arrangements to be
informed about, and to participate in, the affairs of the Trust during such
absence), or is physically or mentally incapacitated, the remaining Trustees
shall have all the powers hereunder and their certificate as to such vacancy,
absence, or incapacity shall be conclusive.
Section 8. Ownership of Trust Property. The Trust Property of the Trust and of
each Series shall be held separate and apart from any assets now or hereafter
held in any capacity other than as Trustee hereunder by the Trustees or any
successor Trustees. Legal title in and beneficial ownership of all of the assets
of the Trust shall at all times be considered as vested in the Trust, except
that the Trustees may cause legal title in and beneficial ownership of any Trust
Property to be held by, or in the name of, one or more of the Trustees acting
for and on behalf of the Trust, or in the name of any person as nominee acting
for and on behalf of the Trust. No Shareholder shall be deemed to have a
severable ownership in any individual asset of the Trust or of any Series or any
right of partition or possession thereof, but each Shareholder shall have, as
provided in Article V, a proportionate undivided beneficial interest in the
Trust or Series or Class thereof represented by Shares. The Shares shall be
personal property giving only the rights specifically set forth in this Trust
Instrument. The Trust, or at the determination of the Trustees one or more of
the Trustees or a nominee acting for and on behalf of the Trust, shall be deemed
to hold legal title and beneficial ownership of any income earned on securities
of the Trust issued by any business entities formed, organized, or existing
under the laws of any jurisdiction, including the laws of any foreign country.
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
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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.
Section 9. Effect of Trustees Not Serving. The death, resignation, retirement,
removal, incapacity or inability or refusal to serve 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.
Section 10. Trustees, etc. as Shareholders. Subject to any restrictions in the
By-laws, any Trustee, officer, agent or independent contractor of the Trust may
acquire, own and dispose of Shares to the same extent as any other Shareholder;
the Trustees may issue and sell Shares to and buy Shares from any such person or
any firm or company in which such person is interested, subject only to any
general limitations herein.
ARTICLE III
CONTRACTS WITH SERVICE PROVIDERS
Section 1. Underwriting Contract. The Trustees may in their discretion from time
to time enter into an exclusive or non-exclusive underwriting contract or
contracts providing for the sale of the Shares whereby the Trustees may either
agree to sell the Shares to the other party to the contract or appoint such
other party as their sales agent for the Shares, and in either case on such
terms and conditions, if any, as may be prescribed in the By-laws, and such
further terms and conditions as the Trustees may in their discretion determine
not inconsistent with the provisions of this Article III or of the By-laws; and
such contract may also provide for the repurchase of the Shares by such other
party as agent of the Trustees.
Section 2. Advisory or Management Contract. The Trustees may in their discretion
from time to time enter into one or more investment advisory or management
contracts or, if the Trustees establish multiple Series, separate investment
advisory or management contracts with respect to one or more Series whereby the
other party or parties to any such contracts shall undertake to furnish the
Trust or such Series management, investment advisory, administration,
accounting, legal, statistical and research facilities and services, promotional
or marketing activities, and such other facilities and services, if any, as the
Trustees shall from time to time consider desirable and all upon such terms and
conditions as the Trustees may in their discretion determine. Notwithstanding
any provisions of the Declaration, the Trustees may authorize the Investment
Advisers or persons to whom the Investment Advisers delegate certain or all of
their duties, or any of them, under any such contracts (subject to such general
or specific instructions as the Trustees may from time to time adopt) to effect
purchases, sales, loans or exchanges of portfolio securities and other
investments of the Trust on behalf of the Trustees or may authorize any officer,
employee or Trustee to effect such purchases, sales, loans or exchanges pursuant
to recommendations of such Investment Advisers, or any of them (and all without
further action by
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the Trustees). Any such purchases, sales, loans and exchanges shall be deemed to
have been authorized by all of the Trustees.
Section 3. Administration Agreement. The Trustees may in their discretion from
time to time enter into an administration agreement or, if the Trustees
establish multiple Series or Classes, separate administration agreements with
respect to each Series or Class, whereby the other party to such agreement shall
undertake to manage the business affairs of the Trust or of a Series or Class
thereof and furnish the Trust or a Series or a Class thereof with office
facilities, and shall be responsible for the ordinary clerical, bookkeeping and
recordkeeping services at such office facilities, and other facilities and
services, if any, and all upon such terms and conditions as the Trustees may in
their discretion determine.
Section 4. Service Agreement. The Trustees may in their discretion from time to
time enter into service agreements with respect to one or more Series or Classes
of Shares whereby the other parties to such Service Agreements will provide
administration and/or support services pursuant to administration plans and
service plans, and all upon such terms and conditions as the Trustees in their
discretion may determine.
Section 5. Transfer Agent. The Trustees may in their discretion from time to
time enter into a transfer agency and shareholder services contract whereby the
other party to such contract shall undertake to furnish transfer agency and
shareholder services to the Trust. The contract shall have such terms and
conditions as the Trustees may in their discretion determine. Such services may
be provided by one or more Persons.
Section 6. Custodian. The Trustees may appoint or otherwise engage one or more
banks or trust companies, each having aggregate capital, surplus and undivided
profits (as shown in its last published report) of at least two million dollars
($2,000,000), or any other entity satisfying the requirements of the 1940 Act,
to serve as Custodian with authority as its agent, but subject to such
restrictions, limitations and other requirements, if any, as may be contained in
the By-laws of the Trust. The Trustees may also authorize the Custodian to
employ one or more sub-custodians as meet the requirements of applicable
provisions of the 1940 Act, and upon such terms and conditions as may be agreed
upon between the Custodian and such sub-custodian, to hold securities and other
assets of the Trust and to perform the acts and services of the Custodian,
subject to applicable provisions of law and resolutions adopted by the Trustees.
The Trustees may delegate to the Trust's officers, Investment Adviser, Custodian
or a Qualified Foreign Bank the responsibility to select Eligible Foreign
Custodians in accordance with the provisions of the 1940 Act or any rule,
regulation or order of the Commission thereunder.
Section 7. Affiliations of Trustees or Officers, Etc. The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust or
any Series thereof is a shareholder, director, officer, partner,
trustee, employee, manager, adviser or distributor of or for any
partnership, corporation, trust, association or other
organization or of or for any parent or affiliate of any
organization, with which a contract of the character described
in this Article III or for services as Custodian, Transfer Agent
or disbursing agent or for related services may have been or may
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hereafter be made, or that any such organization, or any parent
or affiliate thereof, is a Shareholder of or has an interest in
the Trust, or that
(ii) any partnership, corporation, trust, association or other
organization with which a contract of the character described in
Sections 1, 2, 3 or 4 of this Article III or for services as
Custodian, Transfer Agent or disbursing agent or for related
services may have been or may hereafter be made also has any one
or more of such contracts with one or more other partnerships,
corporations, trusts, 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.
ARTICLE IV
COMPENSATION, LIMITATION OF LIABILITY AND INDEMNIFICATION
Section 1. Compensation. The Trustees as such shall be entitled to reasonable
compensation from the Trust, and they may fix the amount of such compensation.
Nothing herein shall in any way prevent the employment of any Trustee for
advisory, management, legal, accounting, investment banking or other services
and payment for the same by the Trust.
Section 2. Limitation of Liability. All persons contracting with or having any
claim against the Trust or a particular Series shall look only to the assets of
all Series or such particular Series for payment under such contract or claim;
and neither the Trustees nor, when acting in such capacity, any of the Trust's
officers, employees or agents, whether past, present or future, shall be
personally liable therefor. Provided they have exercised reasonable care and
have acted under the reasonable belief that their actions are in the best
interest of the Trust, the Trustees and officers of the Trust shall not be
responsible or liable for any act or omission or for neglect or wrongdoing of
them or any officer, agent, employee, Investment Adviser or independent
contractor of the Trust, but nothing contained in this Declaration or in the
Delaware Act shall protect any Trustee or officer of the Trust against liability
to the Trust or to 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.
Section 3. Indemnification. (a) Subject to the exceptions and limitations
contained in subsection (b) below:
(i) every person who is, or has been, a Trustee or an officer,
employee or agent of the Trust (including any individual who
serves at its request as director, officer, partner, trustee or
the like of another organization in which it has any interest as
a shareholder, creditor or otherwise) ("Covered Person") shall
be indemnified by the Trust or the appropriate Series to the
fullest extent permitted by law against liability and against
all expenses reasonably incurred or paid by him in connection
with any claim, action, suit
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or proceeding in which he becomes involved as a party or
otherwise by virtue of his being or having been a Covered Person
and against amounts paid or incurred by him in the settlement
thereof; and
(ii) as used herein, the words "claim," "action," "suit," or
"proceeding" shall apply to all claims, actions, suits or
proceedings (civil, criminal or other, including appeals),
actual or threatened, and the words "liability" and "expenses"
shall include, without limitation, attorneys' fees, costs,
judgments, amounts paid in settlement, fines, penalties and
other liabilities.
(b) No indemnification shall be provided hereunder to a Covered Person:
(i) who shall have been adjudicated by a court or body before which
the proceeding was brought (A) to be liable to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the
conduct of his office, or (B) not to have acted in good faith in
the reasonable belief that his action was in the best interest
of the Trust; or
(ii) in the event of a settlement, unless there has been a
determination that such Covered Person did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his office: (A) by the
court or other body approving the settlement; (B) by at least a
majority of those Trustees who are neither Interested Persons of
the Trust nor are parties to the matter based upon a review of
readily available facts (as opposed to a full trial-type
inquiry); (C) by written opinion of independent legal counsel
based upon a review of readily available facts (as opposed to a
full trial-type inquiry) or (D) by a vote of a majority of the
Outstanding Shares entitled to vote (excluding any Outstanding
Shares owned of record or beneficially by such individual).
(c) The rights of indemnification herein provided may be insured against by
policies maintained by the Trust, shall be severable, shall not be
exclusive of or affect any other rights to which any Covered Person may
now or hereafter be entitled, and shall inure to the benefit of the heirs,
executors and administrators of a Covered Person.
(d) To the maximum extent permitted by applicable law, expenses in connection
with the preparation and presentation of a defense to any claim, action,
suit or proceeding of the character described in subsection (a) of this
Section may be paid by the Trust or applicable Series from time to time
prior to final disposition thereof upon receipt of an undertaking by or on
behalf of such Covered Person that such amount will be paid over by him to
the Trust or applicable Series if it is ultimately determined that he is
not entitled to indemnification under this Section; provided, however,
that either (i) such Covered Person shall have provided appropriate
security for such undertaking, (ii) the Trust is insured against losses
arising out of any such advance payments or (iii) either a majority of the
Trustees who are neither Interested Persons of the Trust nor parties to
the matter, or independent legal counsel in a written opinion, shall have
determined, based upon a review of readily available facts (as opposed to
a full trial-type inquiry) that there is reason to believe that such
Covered Person will not be disqualified from indemnification under this
Section.
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(e) Any repeal or modification of this Article IV by the Shareholders, or
adoption or modification of any other provision of the Declaration or
By-laws that would be inconsistent with this Article, shall be prospective
only, to the extent that such repeal or modification would, if applied
retrospectively, adversely affect any limitation on the liability of any
Covered Person or indemnification available to any Covered Person with
respect to any act or omission which occurred prior to such repeal,
modification or adoption.
Section 4. Indemnification of Shareholders. If any Shareholder or former
Shareholder of any Series shall be held 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 any
entity, its general successor) shall be entitled out of the assets belonging to
the applicable Series to be held harmless from and indemnified against all loss
and expense arising from such liability. The Trust, on behalf of the affected
Series, shall, upon request by such Shareholder, assume the defense of any claim
made against such Shareholder for any act or obligation of the Series and
satisfy any judgment thereon from the assets of the Series.
Section 5. No Bond Required of Trustees. No Trustee shall be obligated to give
any bond or other security for the performance of any of his duties hereunder.
Section 6. No Duty of Investigation; Notice in Trust Instruments, Etc. No
purchaser, lender, transfer agent or other Person dealing with the Trustees or
any officer, employee or agent of the Trust or a Series thereof shall be bound
to make any inquiry concerning the validity of any transaction purporting to be
made by the Trustees or by said officer, employee or agent or be liable for the
application of money or property paid, loaned, or delivered to or on the order
of the Trustees or of said officer, employee or agent. Every obligation,
contract, instrument, certificate, Share, other security of the Trust or a
Series thereof or undertaking, and every other act or thing whatsoever executed
in connection with the Trust shall be conclusively presumed to have been
executed or done by the executors thereof only in their capacity as Trustees
under this Declaration or in their capacity as officers, employees or agents of
the Trust or a Series thereof. Every written obligation, contract, instrument,
certificate, Share, other security of the Trust or a Series thereof or
undertaking made or issued by the Trustees or officers may recite that the same
is executed or made by them not individually, but as Trustees under the
Declaration, and that the obligations of the Trust or a Series thereof under any
such instrument are not binding upon any of the Trustees, officers, employees,
agents or Shareholders individually, but bind only the Trust Property or the
Trust Property of the applicable Series, and may contain any further recital
which they may deem appropriate, but the omission of such recital shall not
operate to bind the Trustees individually.
Section 7. Reliance on Experts, Etc. Each Trustee, officer or employee of the
Trust or a Series thereof shall, in the performance of his duties, powers and
discretion hereunder 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 or a Series thereof, upon an
opinion of counsel, or upon reports made to the Trust or a Series thereof by any
of its officers or employees or by the Investment Adviser, the Administrator,
the Distributor, Transfer
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Agent, selected dealers, accountants, appraisers or other experts or consultants
selected with reasonable care by the Trustees, officers or employees of the
Trust, regardless of whether such counsel or person may also be a Trustee.
ARTICLE V
SERIES; CLASSES; SHARES
Section 1. Establishment of Series or Class. The Trust shall consist of one or
more Series. Without limiting the authority of the Trustees to establish and
designate any further Series, the Trustees hereby establish one Series which
shall be designated as Kelmoore Strategy Covered Option Fund. Each additional
Series shall be established and is effective upon the adoption of a resolution
of a majority of the Trustees or any alternative date specified in such
resolution. The Trustees shall designate the relative rights and preferences of
the Shares of each Series. The Trustees may divide the Shares of any Series into
Classes. Without limiting the authority of the Trustees to establish and
designate any further Classes, the Trustees hereby establish, with respect to
Kelmoore Strategy Covered Option Fund, a single Class of Shares which shall
initially have no designation. The Classes of Shares of the Series herein
established and designated and any Shares of any further Series and Classes that
may from time to time be established and designated by the Trustees shall be
established and designated, and the variations in the relative rights and
preferences as between the different Series or Classes shall be fixed and
determined, by the Trustees; provided, that all Shares shall be identical except
for such variations as shall be fixed and determined between different Series or
Classes by the Trustees in establishing and designating such Series or Class.
Such designation of Series or Classes may be directly set forth by resolution or
may be made by a resolution referring to, or authorizing or approving of,
another document that sets forth such relative rights and preferences of such
Series (or Class) including, without limitation, any registration statement,
prospectus or statement of additional information of the Trust, or as otherwise
provided in such resolution.
All references to Shares in this Declaration shall be deemed to be Shares of any
or all Series or Classes as the context may require. The Trust shall maintain
separate and distinct records for each Series and hold and account for the
assets thereof separately from the other assets of the Trust or of any other
Series. A Series may issue any number of Shares of any Class thereof and need
not issue Shares. Each Share of a Series shall represent an equal beneficial
interest in the net assets of such Series. Each holder of Shares of a Series or
a Class thereof shall be entitled to receive his pro rata share of all
distributions made with respect to such Series or Class. Upon redemption of his
Shares, such Shareholder shall be paid solely out of the funds and property of
such Series. The Trustees may adopt and change the name of any Series or Class.
Section 2. Shares. The beneficial interest in the Trust shall be divided into
transferable Shares of one or more separate and distinct Series or Classes
established by the Trustees. The number of Shares of each Series and Class is
unlimited and each Share shall have a par value of $0.001 per Share or such
other amount as the Trustees may establish. All Shares issued hereunder,
including, without limitation, Shares issued in connection with a dividend in
Shares or a split or reverse split of Shares, shall be fully paid and
nonassessable. Except as otherwise provided by
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the Trustees, Shareholders shall have no preemptive or other right to subscribe
to any additional Shares or other securities issued by the Trust. Subject to the
further provisions of this Article V and any applicable requirements of the 1940
Act, the Trustees shall have full power and authority, in their sole discretion
and without obtaining Shareholder approval, to issue original or additional
Shares at such times and on such terms and conditions as they deem appropriate;
to issue fractional Shares; to establish and to change in any manner Shares of
any Series or Classes with such preferences, terms of conversion, voting powers,
rights and privileges as the Trustees may determine (but the Trustees may not
change Outstanding Shares in a manner materially adverse to the Shareholders of
such Shares); to divide or combine the Shares of any Series or Classes into a
greater or lesser number; to classify or reclassify any unissued Shares of any
Series or Classes into one or more Series or Classes of Shares; to abolish any
one or more Series or Classes of Shares; to issue Shares to acquire other assets
(including assets subject to, and in connection with, the assumption of
liabilities) and businesses; and to take such other action with respect to the
Shares as the Trustees may deem desirable.
Section 3. Investment in the Trust. The Trustees shall accept investments in any
Series or Class from such persons and on such terms as they may from time to
time authorize. At the Trustees' discretion, such investments, subject to
applicable law, may be in the form of cash or securities in which that Series is
authorized to invest, valued as provided in Article VI, Section 3. Investments
in a Series shall be credited to each Shareholder's account in the form of full
Shares at the Net Asset Value per Share next determined after the investment is
received or accepted as may be determined by the Trustees; provided, however,
that the Trustees may, in their sole discretion, (a) impose a sales charge upon
investments in any Series or Class, (b) issue fractional Shares, (c) determine
the Net Asset Value per Share of the initial capital contribution or (d)
authorize the issuance of Shares at a price other than Net Asset Value to the
extent permitted by the 1940 Act or any rule, order or interpretation of the
Commission thereunder. The Trustees shall have the right to refuse to accept
investments in any Series at any time without any cause or reason therefor
whatsoever.
Section 4. Assets and Liabilities of Series. All consideration received by the
Trust for the issue or sale 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 (including any proceeds derived from the
sale, exchange or liquidation of such assets, and any funds or payments derived
from any reinvestment of such proceeds in whatever form the same may be), shall
be held and accounted for separately from the assets of every other Series and
are referred to as "assets belonging to" that Series. The assets belonging to a
Series shall belong only to that Series for all purposes, subject only to the
rights of creditors of that Series, and to no other Series. Any assets, income,
earnings, profits, and proceeds thereof, funds, or payments which are not
readily identifiable as belonging to any particular Series shall be allocated by
the Trustees between and among one or more Series as the Trustees deem fair and
equitable. Each such allocation shall be conclusive and binding upon the
Shareholders of all Series for all purposes, and such assets, earnings, income,
profits or funds, or payments and proceeds thereof shall be referred to as
assets belonging to that Series. The assets belonging to a Series shall be so
recorded upon the books of the Trust, and shall be held by the Trustees in trust
for the benefit of the Shareholders of that Series. The assets belonging to a
Series shall be charged with the
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liabilities of that Series and all expenses, costs, charges and reserves
attributable to that Series, except that liabilities and expenses allocated
solely to a particular Class shall be borne by that Class. Any general
liabilities, expenses, costs, charges or reserves of the Trust which are not
readily identifiable as belonging to any particular Series or Class shall be
allocated and charged by the Trustees between or among any one or more of the
Series or Classes in such manner as the Trustees deem fair and equitable. Each
such allocation shall be conclusive and binding upon the Shareholders of all
Series or Classes for all purposes.
Without limiting the foregoing, but subject to the right of the Trustees to
allocate general liabilities, expenses, costs, charges or reserves as herein
provided, and subject to the statutory provision of Section 3804 of the Delaware
Act referred to below, the debts, liabilities, obligations and expenses
incurred, contracted for or otherwise existing with respect to a particular
Series shall be enforceable against the assets of such Series only, and not
against the assets of the Trust generally or any other Series, and none of the
debts, liabilities, obligations and expenses incurred, contracted for or
otherwise existing with respect to the Trust generally or any other Series shall
be enforceable against the assets of such Series. Notice of this contractual
limitation on liabilities among Series may, in the Trustees' discretion, be set
forth in the certificate of trust of the Trust (whether originally or by
amendment) as filed or to be filed in the Office of the Secretary of State of
the State of Delaware pursuant to the Delaware Act, and upon the giving of such
notice in the certificate of trust, the statutory provisions of Section 3804 of
the Delaware Act relating to limitations on liabilities among Series (and the
statutory effect under Section 3804 of setting forth such notice in the
certificate of trust) shall become applicable to the Trust and each Series. Any
person extending credit to, contracting with or having any claim against any
Series may look only to the assets of that Series to satisfy or enforce any debt
with respect to that Series. No Shareholder or former Shareholder of any Series
shall have a claim on or any right to any assets allocated or belonging to any
other Series.
Section 5. Ownership and Transfer of Shares. The Trust or a Transfer Agent or
similar agent for the Trust shall maintain a register containing the names and
addresses of the Shareholders of each Series and Class thereof, the number of
Shares of each Series and Class held by such Shareholders, and a record of all
Share transfers. The register shall be conclusive as to the identity of
Shareholders of record and the number of Shares held by them from time to time.
The Trustees may authorize the issuance of certificates representing Shares and
adopt rules governing their use. The Trustees may make rules governing the
transfer of Shares, whether or not represented by certificates. 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 a
proposed transfer. Without limitation of the foregoing, the Trust or its agent
may
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issue certificates representing Shares and transfer such certificates to a
governmental unit, agency, authority, or authorized depository without prior
notice to a Shareholder and without liability to such Shareholder, to the extent
such action is taken (1) in the response to a notice of xxxx, xxxx or similar
action from the Internal Revenue Service or a state tax authority, (2) in
compliance with state laws governing escheat or abandonment of property, or (3)
otherwise in compliance with any applicable legal obligation.
Section 6. Status of Shares; Limitation of Shareholder Liability. Shares shall
be deemed to be personal property giving Shareholders only the rights provided
in this Declaration. Every Shareholder, by virtue of having acquired a Share,
shall be held expressly to have assented to and agreed to be bound by the terms
of this Declaration and to have become a party hereto. No Shareholder shall be
personally liable for the debts, liabilities, obligations and expenses incurred
by, contracted for, or otherwise existing with respect to, the Trust or any
Series. 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 such 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 shall have any power to bind any Shareholder personally or to demand
payment from any Shareholder for anything, other than as agreed by the
Shareholder. Shareholders shall have the same limitation of personal liability
as is extended to shareholders of a private corporation for profit incorporated
in the State of Delaware. Every written obligation of the Trust or any Series
may contain a statement to the effect that such obligation may only be enforced
against the assets of the appropriate Series or all Series; however, the
omission of such statement shall not operate to bind or create personal
liability for any Shareholder or Trustee.
ARTICLE VI
DISTRIBUTIONS AND REDEMPTIONS
Section 1. Distributions. The Trustees, or a committee of one or more Trustees
or of one or more Trustees and one or more officers, may declare and pay
dividends and other distributions, including dividends on Shares of a particular
Series and other distributions from the assets belonging to that Series. No
dividend or distribution, including, without limitation, any distribution paid
upon termination of the Trust or of any Series (or Class) with respect to, nor
any redemption or 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 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
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. The amount and payment of
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dividends or distributions and their form, whether they are in cash, Shares or
other Trust Property, shall be determined by the Trustees. Dividends and other
distributions may be paid pursuant to a standing resolution adopted once or more
often as the Trustees determine. All dividends and other distributions on Shares
of a particular Series shall be distributed pro rata to the Shareholders of that
Series in proportion to the number of Shares of that Series they held on the
record date established for such payment, except that such dividends and
distributions shall appropriately reflect expenses allocated to a particular
Class of such Series and shall be reduced by any required backup, nonresident
alien, or other withholding taxes, which shall be deposited by the Trust in
accordance with applicable law. The Trustees may adopt and offer to Shareholders
such dividend reinvestment plans, cash dividend payout plans or similar plans as
the Trustees deem appropriate.
Section 2. Redemptions. Each Shareholder of a Series shall have the right at
such times as may be permitted by the Trustees to require the Series to redeem
all or any part of his Shares at a redemption price per Share equal to the Net
Asset Value per Share at such time as the Trustees shall have prescribed by
resolution, or, to the extent permitted by the 1940 Act, at such other
redemption price and at such times as the Trustees shall prescribe by
resolution. In the absence of such resolution, the redemption price per Share
shall be the Net Asset Value next determined after receipt by the Series of a
request for redemption in proper form less (1) such charges as are determined by
the Trustees and described in the Trust's Registration Statement for that Series
under the Securities Act of 1933, as amended from time to time, and (2) any
required withholding taxes, which shall be deposited by the Trust in accordance
with applicable law. The Trustees may specify conditions, prices, and places of
redemption, may specify binding requirements for the proper form or forms of
requests for redemption and may specify the amount of any deferred sales charge
or redemption fee to be withheld from redemption proceeds. Payment of the
redemption price may be wholly or partly in securities or other assets at the
value of such securities or assets used in such determination of Net Asset
Value, or may be in cash. Upon redemption, Shares shall be cancelled. The
Trustees may require Shareholders to redeem Shares for any reason under terms
set by the Trustees, including, but not limited to, the failure of a Shareholder
to supply a taxpayer identification number or other information or certification
required by federal or state tax laws, or to have the minimum investment
required, or to pay when due for the purchase of Shares issued to him. To the
extent permitted by law, the Trustees may retain the proceeds of any redemption
of Shares required by them for payment of amounts due and owing by a Shareholder
to the Trust or any Series or Class or any governmental authority. Without
limitation of the foregoing, the Trust may mandatorily redeem shares and the
Trust or its agent may transfer the proceeds of such a redemption to a
governmental unit, agency, authority, or authorized depository without prior
notice to a Shareholder and without liability to such shareholder, to the extent
such action is taken (1) in response to a notice of levy, lien, or similar
action from the Internal Revenue Service or a state tax authority, (2) in
compliance with state laws governing escheat or abandonment of property, (3) in
satisfaction of withholding tax requirements (including any applicable interest
and penalties) applicable to any prior distribution or distributions (including
a redemption or redemptions) to the Shareholder that were not satisfied at the
time of such distribution or distributions or (4) otherwise in compliance with
any applicable legal obligation. Notwithstanding the foregoing, the Trustees may
postpone payment of the redemption price and may suspend the right of the
Shareholders to require any Series or
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Class to redeem Shares during any period of time when and to the extent
permissible under the 1940 Act.
Section 3. Determination of Net Asset Value. The Trustees shall cause the Net
Asset Value of Shares of each Series or Class to be determined from time to time
in a manner consistent with applicable laws and regulations. The Trustees may
delegate the power and duty to determine Net Asset Value per Share to one or
more Trustees or officers of the Trust or to a custodian, depository or other
agent appointed for such purpose. The Net Asset Value of Shares shall be
determined separately for each Series or Class at such times as may be
prescribed by the Trustees or, in the absence of action by the Trustees, as of
the close of regular trading on the New York Stock Exchange on each day for all
or part of which such Exchange is open for trading.
Section 4. Suspension of Right of Redemption. If, as referred to in Section 2 of
this Article, the Trustees postpone payment of the redemption price and suspend
the right of Shareholders to redeem their Shares, such suspension shall take
effect at the time the Trustees shall specify, but not later than the close of
business on the business day next following the declaration of suspension.
Thereafter Shareholders shall have no right of redemption or payment until the
Trustees declare the end of the suspension. If the right of redemption is
suspended, a Shareholder may either withdraw his request for redemption or
receive payment based on the Net Asset Value per Share next determined after the
suspension terminates.
Section 5. Repurchase by Agreement. The Trust may repurchase Shares directly, or
through the Distributor or another agent designated for the purpose, by
agreement with the owner thereof at a price not exceeding the Net Asset Value
per Share determined as of the time when the purchase or contract of purchase is
made or the Net Asset Value as of any time which may be later determined,
provided payment is not made for the Shares prior to the time as of which such
Net Asset Value is determined.
ARTICLE VII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 1. Voting Powers. The Shareholders shall have power to vote only with
respect to (a) the election of Trustees as provided in the 1940 Act; (b) the
removal of Trustees as provided in Article II, Section 5(d); (c) any investment
advisory or management contract entered into pursuant to Article III, Section 2,
unless a shareholder vote is not required pursuant to the provisions of the 1940
Act or any rule, regulation or order of the Commission thereunder; (d) any
termination of the Trust to the extent and as provided in Article IX, Section 3;
(e) the amendment of this Declaration to the extent and as provided in Article
IX, Section 7; and (f) such additional matters relating to the Trust as may be
required or authorized by law, this Declaration, or the By-laws or any
registration of the Trust with the Commission or as the Trustees may consider
desirable.
On any matter submitted to a vote of the Shareholders, all Shares shall be voted
by individual Series or Class, except (a) when required by the 1940 Act, Shares
shall be voted in the aggregate
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and not by individual Series or Class, and (b) when the Trustees have determined
that the matter affects the interests of more than one Series or Class, then the
Shareholders of all such Series or Classes shall be entitled to vote together
thereon. As determined by the Trustees pursuant to resolution and without the
vote or consent of Shareholders, on any matter submitted to a vote of
Shareholders either (i) each whole Share shall be entitled to one vote as to any
matter on which it is entitled to vote and each fractional Share shall be
entitled to a proportionate fractional vote or (ii) each dollar of net asset
value (number of Shares owned times net asset value per Share of such Series or
Class, as applicable) shall be entitled to one vote on any matter on which such
Shares are entitled to vote and each fractional dollar amount shall be entitled
to a proportionate fractional vote. There shall be no cumulative voting in the
election of Trustees. Shares may be voted in person or by proxy or in any manner
provided for in the By-laws. The By-laws may provide that proxies may be given
by any electronic or telecommunications device or in any other manner, 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. 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, this Declaration or the By-laws. Meetings of Shareholders
shall be called and notice thereof and record dates therefor shall be given and
set as provided in the By-laws.
Section 2. Quorum; Required Vote. One-third (33 1/3%) of the Outstanding Shares
of each affected Series or Class, or one-third (33 1/3%) of the Outstanding
Shares of the Trust, entitled to vote in person or by proxy shall be a quorum
for the transaction of business at a Shareholders' meeting with respect to such
Series or Class, or with respect to the entire Trust, respectively. Any lesser
number shall be sufficient for adjournments. Any adjourned session of a
Shareholders' meeting may be held within a reasonable time without further
notice. Except when a larger vote is required by applicable law, this
Declaration or the By-laws, a majority of the Outstanding Shares voting at a
Shareholders' meeting in person or by proxy shall decide any matters to be voted
upon with respect to the entire Trust and a plurality of such Outstanding Shares
shall elect a Trustee; provided, that if this Declaration or applicable law
permits or requires that Shares be voted on any matter by individual Series or
Classes, then a majority of the Outstanding Shares of that Series or Class
voting at a Shareholders' meeting in person or by proxy on the matter shall
decide that matter insofar as that Series or Class is concerned. Shareholders
may act as to the Trust or any Series or Class by the written consent of a
majority (or such other amount as may be required by applicable law) of the
Outstanding Shares of the Trust or of such Series or Class, as the case may be.
Section 3. Abstentions and Broker Non-Votes. Outstanding Shares represented in
person or by proxy (including Shares which abstain or do not vote with respect
to one or more of any proposals presented for Shareholder approval) will be
counted for purposes of determining whether a quorum is present at a meeting.
Abstentions will be treated as Shares that are present and entitled to vote for
purposes of determining the number of Shares that are present and entitled to
vote with respect to any particular proposal, but will not be counted as a vote
in favor of such proposal. If a broker or nominee holding Shares in "street
name" indicates on the proxy
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that it does not have discretionary authority to vote as to a particular
proposal, those Shares will not be considered as present and entitled to vote
with respect to such proposal.
Section 4. Action Without Meeting. Any action which may be taken by Shareholders
may be taken without a meeting if a majority of Outstanding Shares entitled to
vote on the matter (or such larger proportion thereof as shall be required by
law) consent to the action in writing and the written consents are filed with
the records of the meetings of Shareholders. Such consents shall be treated for
all purposes as a vote taken at a meeting of Shareholders.
Section 5. Record Dates.
(a) 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 distribution purposes close the register
or transfer books for one or more Series or Classes any time prior to the
payment of a distribution. Nothing in this Section shall be construed as
precluding the Trustees from setting different record dates for different
Series or Classes.
(b) The Trustees may fix in advance a date up to one hundred twenty (120) days
before the date of any Shareholders' meeting, or the date for the allotment
of rights, or the date when any change or conversion or exchange of Shares
shall go into effect as a record date for the determination of the
Shareholders entitled to notice of, and to vote at, any such meeting, or to
receive any such allotment of rights, or to exercise such rights in respect
of any such change, conversion or exchange of Shares.
Section 6. Additional Provisions. The By-laws may include further provisions for
Shareholders' votes and meetings and related matters.
ARTICLE VIII
EXPENSES OF THE TRUST AND SERIES
Section 1. Payment of Expenses by the Trust. Subject to Article V, Section 4,
the Trust or a particular Series shall pay, or shall reimburse the Trustees from
the assets belonging to all Series or the particular Series, for their expenses
(or the expenses of a Class of such Series) and disbursements, including, but
not limited to, interest charges, taxes, brokerage fees and commissions;
expenses of issue, repurchase and redemption of Shares; insurance premiums;
applicable fees, interest charges and expenses of third parties, including the
Trust's investment advisers, managers, administrators, distributors, custodians,
transfer agents, fund accountants; fees of pricing, interest, dividend, credit
and other reporting services; costs of membership in trade associations;
telecommunications expenses; funds transmission expenses; auditing, legal
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and compliance expenses; costs of forming the Trust and its Series and
maintaining its existence; costs of preparing and printing the prospectuses of
the Trust and each Series, statements of additional information and Shareholder
reports and delivering them to Shareholders; expenses of meetings of
Shareholders and proxy solicitations therefor; costs of maintaining books and
accounts; costs of reproduction, stationery and supplies; fees and expenses of
the Trustees; compensation of the Trust's officers and employees and costs of
other personnel performing services for the Trust or any Series; costs of
Trustee meetings; Commission registration fees and related expenses; state or
foreign securities laws registration and notice fees and related expenses; and
for such non-recurring items as may arise, including litigation to which the
Trust or a Series (or a Trustee or officer of the Trust acting as such) is a
party, and for all losses and liabilities by them incurred in administering the
Trust. The Trustees shall have a lien on the assets belonging to the appropriate
Series, or in the case of an expense allocable to more than one Series, on the
assets of each such Series, prior to any rights or interests of the Shareholders
thereto, for the reimbursement to them of such expenses, disbursements, losses
and liabilities.
Section 2. Payment of Expenses by Shareholders. The Trustees shall have the
power, as frequently as they may determine, to cause each Shareholder, or each
Shareholder of any particular Series, to pay directly, in advance or arrears,
for charges due from such Shareholder of the Trust's custodian or transfer,
shareholder servicing or similar agent, an amount fixed from time to time by the
Trustees, by setting off such charges 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.
ARTICLE IX
MISCELLANEOUS
Section 1. Trust Not a Partnership. This Declaration creates a trust and not a
partnership. No Trustee shall have any power to bind personally either the
Trust's officers or any Shareholder.
Section 2. Trustee Action. The exercise by the Trustees of their powers and
discretion hereunder in good faith and with reasonable care under the
circumstances then prevailing shall be binding upon everyone interested. Subject
to the provisions of Article IV, the Trustees shall not be liable for errors of
judgment or mistakes of fact or law.
Section 3. Termination of the Trust. (a) This Trust shall have perpetual
existence. Subject to the vote of a majority of the Outstanding Shares of the
Trust, or of each Series to be affected, voting at a Shareholders' meeting in
person or by proxy, the Trustees may:
(i) sell and convey all or substantially all of the assets of all
Series or any affected Series to another Series or to another
entity which is an open-end investment company as defined in the
1940 Act, or is a series thereof, for adequate consideration,
which may include the assumption of all outstanding obligations,
taxes and other liabilities, accrued or
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contingent, of the Trust or any affected Series, and which may
include shares of or interests in such Series, entity, or series
thereof; or
(ii) at any time sell and convert into money all or substantially all
of the assets of all Series or any affected Series.
Upon making reasonable provision for the payment of all known liabilities of all
Series or any affected Series in either (i) or (ii), by such assumption or
otherwise, the Trustees shall distribute the remaining proceeds or assets (as
the case may be) ratably among the Shareholders of all Series or any affected
Series; however, the payment to any particular Class of such Series may be
reduced by any fees, expenses or charges allocated to that Class.
(b) The Trustees may take any of the actions specified in subsection (a) (i)
and (ii) above without obtaining the vote of a majority of the Outstanding
Shares of the Trust or any Series voting at a Shareholders' meeting in
person or by proxy if a majority of the Trustees determines that the
continuation of the Trust or Series is not in the best interests of the
Trust, such Series, or their respective Shareholders as a result of
factors or events adversely affecting the ability of the Trust or such
Series to conduct its business and operations in an economically viable
manner. Such factors and events may include the inability of the Trust or
a Series to maintain its assets at an appropriate size, changes in laws or
regulations governing the Trust or the Series or affecting assets of the
type in which the Trust or Series invests, or economic developments or
trends having a significant adverse impact on the business or operations
of the Trust or such Series.
(c) Upon completion of the distribution of the remaining proceeds or assets
pursuant to subsection (a) the Trustees and the Trust or affected Series
shall be discharged of any and all further liabilities and duties
hereunder with respect thereto and the right, title and interest of all
parties therein shall be canceled and discharged and any such Series shall
terminate. 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, and
upon filing of such certificate of cancellation, the Trust shall
terminate.
Section 4. Reorganization. (a) Notwithstanding anything else herein, to change
the Trust's form or place of organization, the Trustees may, without Shareholder
approval (unless such approval is required by applicable law), (i) cause the
Trust to merge or consolidate with or into one or more entities, if the
surviving or resulting entity is the Trust or another open-end management
investment company under the 1940 Act, or a series thereof, that will succeed to
or assume the Trust's registration under the 1940 Act, (ii) cause the Shares to
be exchanged under or pursuant to any state or federal statute to the extent
permitted by law, or (iii) cause the Trust to incorporate under the laws of
Delaware or any other U.S. jurisdiction. Any agreement of merger or
consolidation or certificate of merger may be signed by a majority of Trustees
and facsimile signatures conveyed by electronic or telecommunication means shall
be valid.
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(b) Pursuant to and in accordance with the provisions of Section 3815(f) of
the Delaware Act, an agreement of merger or consolidation approved by the
Trustees in accordance with this Section 4 may effect any amendment to the
Declaration or effect the adoption of a new trust instrument of the Trust
if it is the surviving or resulting trust in the merger or consolidation.
(c) The Trustees may create one or more business trusts to which all or any
part of the assets, liabilities, profits or losses of the Trust or any
Series or Class thereof may be transferred and may provide for the
conversion of Shares in the Trust or any Series or Class thereof into
beneficial interests in any such newly created trust or trusts or any
series or classes thereof.
Section 5. Declaration of Trust. The original or a copy of this Declaration and
of each amendment hereto or Declaration supplemental 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 a Trustee or an officer of the Trust as
to the authenticity of the Declaration or any such amendments or supplements and
as to any matters in connection with the Trust. The masculine gender herein
shall include the feminine and neuter genders. Headings herein are for
convenience only and shall not affect the construction of this Declaration. This
Declaration may be executed in any number of counterparts, each of which shall
be deemed an original.
Section 6. Applicable Law. This Declaration and the Trust created hereunder are
governed by and construed and administered according to the Delaware Act and the
applicable laws of the State of Delaware; provided, however, that there shall
not be applicable to the Trust, the Trustees or this Declaration (a) the
provisions of Section 3540 of Title 12 of the Delaware Code, or (b) any
provisions of the laws (statutory or common) of the State of Delaware (other
than the Delaware Act) pertaining to trusts which 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 a trust, (iii) the
necessity for obtaining court or other governmental approval concerning the
acquisition, holding or disposition of real or personal property, (iv) fees or
other sums payable to 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 (vii) the establishment of fiduciary or
other standards of responsibilities or limitations on the acts or powers of
trustees, which are inconsistent with the limitations or liabilities or
authorities and powers of the Trustees set forth or referenced in this
Declaration. The Trust shall be of the type commonly called a Delaware business
trust, and, without limiting the provisions hereof, the Trust may exercise all
powers which are ordinarily exercised by such a trust under Delaware law. The
Trust specifically reserves the right to exercise any of the powers or
privileges afforded to trusts or actions that may be engaged in by 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.
Section 7. Amendments. The Trustees may, without any Shareholder vote, amend or
otherwise supplement this Declaration by making an amendment, a Declaration of
Trust supplemental hereto or an amended and restated trust instrument; provided,
that Shareholders shall have the
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right to vote on any amendment (a) which would affect the voting rights of
Shareholders granted in Article VII, Section 1, (b) to this Section 7, (c)
required to be approved by Shareholders by law or by the Trust's registration
statement(s) filed with the Commission, or (d) submitted to them by the Trustees
in their discretion. Any amendment submitted to Shareholders which the Trustees
determine would affect the Shareholders of any Series shall be authorized by
vote of the Shareholders of such Series and no vote shall be required of
Shareholders of a Series not affected. Notwithstanding anything else herein, (i)
any amendment to Article IV which would have the effect of reducing the
indemnification or other rights provided thereby to Trustees, officers,
employees, and agents of the Trust or to Shareholders or former Shareholders,
and any repeal or amendment of this sentence shall each require the affirmative
vote of the holders of two-thirds of the Outstanding Shares of the Trust
entitled to vote thereon and (ii) no amendment to Article IV that would have the
effect of reducing the indemnification or other rights provided thereby to
Trustees, officers, employees, and agents of the Trust or to Shareholders or
former Shareholders shall be effective with respect to any acts or omissions of
any such Persons occurring or otherwise relating to any time period prior to the
adoption of such amendment or shall otherwise have any retroactive effect.
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) 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;
(b) 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 advisers 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 advisers in the event that the Trustees determine not
to bring such action; and
(c) Shareholders are not relieved of the conditions in Sections 8(a) and (b)
if a Trustee who is not an Interested Person of the Trust or any Series
serves as a trustee of any other investment company in the Fund Complex.
(d) Shareholders of an unaffected Series or Class may not bring a derivative
action on behalf of another Series or Class.
Section 9. Fiscal Year. The fiscal year of the Trust shall end on a specified
date as adopted by resolution of the Trustees. The taxable year of each Series
of the Trust shall be as determined by the Trustees from time to time.
Section 10. Severability. The provisions of this Declaration are severable. If
the Trustees determine, with the advice of counsel, that any provision hereof
conflicts with the 1940 Act, the
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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; provided, however, that
such determination shall not affect any of the remaining provisions of this
Declaration or render invalid or improper any action taken or omitted prior to
such determination. If any provision hereof shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision only in such jurisdiction and shall not affect any
other provision of this Declaration.
IN WITNESS WHEREOF, the undersigned being the sole initial Trustee of
the Trust executed this instrument as of the date first written above.
/s/ Xxxxx X. Kelmon
Xxxxx X. Kelmon 0000 X. Xxxxxxxx Xx., Xxxxx 000
as Trustee and not individually Xxxx Xxxx, XX 00000
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