AMENDED AND RESTATED
AGREEMENT AND DECLARATION OF TRUST
OF
FRANKLIN XXXXXXXXX LIMITED DURATION INCOME TRUST
A DELAWARE STATUTORY TRUST
TABLE OF CONTENTS
PAGE
ARTICLE I. NAME; OFFICES; REGISTERED AGENT; DEFINITIONS......2
SECTION 1. NAME..............................................2
SECTION 2. OFFICES OF THE TRUST..............................2
SECTION 3. REGISTERED AGENT AND REGISTERED OFFICE............2
SECTION 4. DEFINITIONS.......................................2
ARTICLE II. PURPOSE OF TRUST..................................4
ARTICLE III. SHARES............................................6
SECTION 1. DIVISION OF BENEFICIAL INTEREST...................6
SECTION 2. SALE OF SHARES....................................6
SECTION 3. STATUS OF SHARES AND LIMITATION OF PERSONAL
LIABILITY........................................7
SECTION 4. POWER OF BOARD OF TRUSTEES TO MAKE TAX STATUS
ELECTION.........................................7
SECTION 5. SERIES AND CLASSES................................7
SECTION 6. INDEMNIFICATION OF SHAREHOLDERS...................8
ARTICLE IV. THE BOARD OF TRUSTEES.............................8
SECTION 1. NUMBER, CLASSES AND ELECTION, TERM, REMOVAL AND
RESIGNATION.......................................8
SECTION 2. TRUSTEE ACTION BY WRITTEN CONSENT WITHOUT A
MEETING..........................................9
SECTION 3. POWERS; OTHER BUSINESS INTERESTS; QUORUM AND
REQUIRED VOTE...................................10
SECTION 4. PAYMENT OF EXPENSES BY THE TRUST.................11
SECTION 5. PAYMENT OF EXPENSES BY SHAREHOLDERS..............11
SECTION 6. OWNERSHIP OF TRUST PROPERTY......................11
SECTION 7. SERVICE CONTRACTS................................12
ARTICLE V. SHAREHOLDERS' VOTING POWERS AND MEETINGS.........13
SECTION 1. VOTING POWERS....................................13
SECTION 2. QUORUM AND REQUIRED VOTE.........................13
SECTION 3. SHAREHOLDER ACTION BY WRITTEN CONSENT
WITHOUT A MEETING ..............................14
SECTION 4. RECORD DATES.....................................14
SECTION 5. ADDITIONAL PROVISIONS............................15
ARTICLE VI. NET ASSET VALUE; DISTRIBUTIONS; REPURCHASES;
TRANSFERS ......................................15
SECTION 1. DETERMINATION OF NET ASSET VALUE, NET INCOME AND
DISTRIBUTIONS....................................15
SECTION 2. REPURCHASE OF SHARES WITH SHAREHOLDER CONSENT....15
SECTION 3. REPURCHASE OF SHARES WITHOUT SHAREHOLDER CONSENT.16
SECTION 4. TRANSFER OF SHARES...............................16
ARTICLE VII. LIMITATION OF LIABILITY AND INDEMNIFICATION
OF AGENT........................................16
SECTION 1. LIMITATION OF LIABILITY..........................16
SECTION 2. INDEMNIFICATION..................................17
SECTION 3. INSURANCE........................................18
SECTION 4. DERIVATIVE ACTIONS...............................19
ARTICLE VIII. APPROVAL OF CERTAIN TRANSACTIONS.................19
SECTION 1. VOTE REQUIRED....................................19
SECTION 2. DISSOLUTION......................................19
SECTION 3. MERGER OR CONSOLIDATION; CONVERSION;
REORGANIZATION..................................20
SECTION 4. RECLASSIFICATION OF THE TRUST....................21
SECTION 5. PRINCIPAL HOLDER TRANSACTIONS....................21
ARTICLE IX. AMENDMENTS.......................................22
SECTION 1. AMENDMENTS GENERALLY.............................22
SECTION 2. SPECIAL AMENDMENTS...............................23
ARTICLE X. MISCELLANEOUS....................................23
SECTION 1. REFERENCES; HEADINGS; COUNTERPARTS...............23
SECTION 2. APPLICABLE LAW...................................23
SECTION 3. PROVISIONS IN CONFLICT WITH LAW OR REGULATIONS...23
SECTION 4. STATUTORY TRUST ONLY.............................24
SECTION 5. USE OF THE NAMES "FRANKLIN" OR "XXXXXXXXX".......24
AMENDED AND RESTATED
AGREEMENT AND DECLARATION OF TRUST
OF
FRANKLIN XXXXXXXXX LIMITED DURATION INCOME TRUST
AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST ("Declaration of
Trust") made as of this __ day of June, 2003, by the Trustees hereunder, and
by the holders of Shares to be issued by the Trust hereunder as hereinafter
provided.
WITNESSETH:
WHEREAS the Trust was formed on May __, 2003 by its sole Trustee by the
filing of a Certificate of Trust with the office of the Secretary of State of
the State of Delaware pursuant to an Agreement and Declaration of Trust,
dated as of May__, 2003 (the "Original Declaration");
WHEREAS the Trust has been formed to carry on the business of a
closed-end management investment company as defined in the 1940 Act;
WHEREAS the Trustees have agreed to manage all property coming into
their hands as trustees of a Delaware statutory trust in accordance with the
provisions of the Delaware Statutory Trust Act, as amended from time to time,
and the provisions hereinafter set forth; and
WHEREAS pursuant to the provisions of the Original Declaration, the
Board of Trustees desires to amend and restate the Original Declaration in
the manner hereinafter set forth, including amendments to provide for
preferred Shares and to change the dissolution provisions.
NOW, THEREFORE, the Trustees hereby declare that:
(i)..the Original Declaration is amended and restated in its entirety in
the manner hereinafter set forth;
(ii).they will hold all cash, securities and other assets that they may
from time to time acquire in any manner as Trustees hereunder IN TRUST to
manage and dispose of the same upon the following terms and conditions for
the benefit of the holders from time to time of Shares as hereinafter set
forth;
(iii).this Declaration of Trust and the By-Laws shall be binding in
accordance with their terms on every Trustee, by virtue of having become a
Trustee of the Trust, and on every Shareholder, by virtue of having become a
Shareholder of the Trust, pursuant to the terms of the Original Declaration
and/or this Declaration of Trust and the By-Laws.
ARTICLE I.
NAME; OFFICES; REGISTERED AGENT; DEFINITIONS
Section 1. NAME. The Trust shall be known as "Franklin Xxxxxxxxx Limited
Duration Income Trust" and the Board of Trustees shall conduct the business
of the Trust under that name, or any other name as it may from time to time
designate.
Section 2. OFFICES OF THE TRUST. The Board may at any time establish offices
of the Trust at any place or places where the Trust intends to do business.
Section 3. REGISTERED AGENT AND REGISTERED OFFICE. The name of the registered
agent of the Trust and the address of the registered office of the Trust are
as set forth in the Trust's Certificate of Trust.
Section 4. DEFINITIONS. Whenever used herein, unless otherwise required by
the context or specifically provided:
(a) "1940 ACT" shall mean the Investment Company Act of 1940 and the rules
and regulations thereunder, all as adopted or amended from time to time;
(b) "AFFILIATE" shall have the same meaning as "affiliated person" as such
term is defined in the 1940 Act when used with reference to a specified
Person, as defined below.
(c) "BOARD OF TRUSTEES" or "BOARD" shall mean the governing body of the
Trust, that is comprised of the number of Trustees of the Trust fixed from
time to time pursuant to Article IV hereof, having the powers and duties set
forth herein;
(d) "BY-LAWS" shall mean By-Laws of the Trust, as amended or restated from
time to time in accordance with Article VIII therein. Such By-Laws may
contain any provision not inconsistent with applicable law or this
Declaration of Trust, relating to the governance of the Trust;
(e) "CERTIFICATE OF TRUST" shall mean the certificate of trust of the Trust
filed with the office of the Secretary of State of the State of Delaware as
required under the DSTA to form the Trust, as such certificate shall be
amended or restated from time to time and filed with such office;
(f) "CODE" shall mean the Internal Revenue Code of 1986 and the rules and
regulations thereunder, all as adopted or amended from time to time;
(g) "COMMISSION" shall have the meaning given that term in the 1940 Act;
(h) "DSTA" shall mean the Delaware Statutory Trust Act (12 DEL. C. ss. 3801,
et SEQ.), as amended from time to time;
(i) "DECLARATION OF TRUST" shall mean this Amended and Restated Agreement
and Declaration of Trust, as amended or restated from time to time;
(j) "INTERESTED PERSON" shall have the meaning given that term in the 1940
Act;
(k) "INVESTMENT ADVISER" or "ADVISER" shall mean a Person, as defined below,
furnishing services to the Trust pursuant to any investment advisory or
investment management contract described in Article IV, Section 7(a) hereof;
(l) "NATIONAL FINANCIAL EMERGENCY" shall mean the whole or any part of any
period during (i) which an emergency exists as a result of which disposal by
the Trust of securities or other assets owned by the Trust is not reasonably
practicable; (ii) which it is not reasonably practicable for the Trust fairly
to determine the net asset value of its assets; or (iii) such other period as
the Commission may by order permit for the protection of investors;
(m) "PERSON" shall mean a natural person, partnership, limited partnership,
limited liability company, trust, estate, association, corporation,
organization, custodian, nominee or any other individual or entity in its own
or any representative capacity, in each case, whether domestic or foreign,
and a statutory trust or a foreign statutory trust;
(n) "PRINCIPAL UNDERWRITER" shall have the meaning given that term in the
1940 Act;
(o) "SHARES" shall mean the outstanding shares of beneficial interest into
which the beneficial interest in the Trust shall be divided from time to
time, and shall include fractional and whole shares;
(p) "SHAREHOLDER" shall mean a record owner of Shares pursuant to the
By-Laws;
(q) "TRUST" shall mean the Delaware statutory trust formed pursuant to the
Original Declaration and the filing of the Certificate of Trust with the
office of the Secretary of State of the State of Delaware;
(r) "TRUST PROPERTY" shall mean any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account of the
Trust, including, without limitation, the rights referenced in Article X,
Section 5 hereof;
(s) "TRUSTEE" or "TRUSTEES" shall mean each Person that signed the Original
Declaration or that signs this Declaration of Trust as a trustee, so long as
such signatory continues in office in accordance with the terms hereof, and
all other Persons who may, from time to time, be duly elected or appointed,
qualified and serving on the Board of Trustees in accordance with the
provisions hereof and the By-Laws. Reference herein to a Trustee or the
Trustees shall refer to such Person or Persons in such Person's or Persons'
capacity as a trustee or trustees hereunder and under the By-Laws; and
(t) "VOTE OF A MAJORITY OF THE OUTSTANDING VOTING SECURITIES" shall have the
meaning provided under Subsection 2(a)(42) of the 1940 Act or any successor
provision thereof, which Subsection, as of the date hereof, is as follows:
the vote, at a meeting of the Shareholders, (i) of sixty-seven percent (67%)
or more of the voting securities present in person or represented by proxy at
such meeting, if the holders of more than fifty percent (50%) of the
outstanding voting securities of the Trust are present or represented by
proxy; or (ii) of more than fifty percent (50%) of the outstanding voting
securities of the Trust, whichever is the less.
ARTICLE II.
PURPOSE OF TRUST
The purpose of the Trust is to conduct, operate and carry on the
business of a management investment company registered under the 1940 Act,
investing primarily in securities and other financial instruments or
property, and to exercise all of the powers granted to a statutory trust
formed under the DSTA, including, without limitation, the following powers:
(a) To hold, invest and reinvest its funds, and in connection therewith to
hold part or all of its funds in cash, and to purchase, subscribe for or
otherwise acquire, hold for investment or otherwise, to trade and deal in,
write, sell, assign, negotiate, transfer, exchange, lend, pledge or otherwise
dispose of, turn to account for, or realize upon, securities (which term
"securities" shall for the purposes of this Declaration of Trust, without
limitation of the generality thereof, be deemed to include any stocks,
shares, bonds, debentures, bills, notes, mortgages, other obligations or
evidences of indebtedness, or financial instruments of any kind or nature,
and any options, certificates, receipts, warrants, futures contracts or other
instruments representing rights to receive, purchase or subscribe for the
same, or evidencing or representing any other rights or interests therein or
in any property or assets, and any negotiable or non-negotiable instruments
and money market instruments, including bank certificates of deposit, finance
paper, commercial paper, bankers' acceptances and all kinds of repurchase or
reverse repurchase agreements) created or issued by any United States or
foreign issuer (which term "issuer" shall, for the purposes of this
Declaration of Trust, without limiting the generality thereof, be deemed to
include any persons, firms, associations, partnerships, corporations, trusts,
syndicates, combinations, organizations, governments or subdivisions,
agencies or instrumentalities of any government); and to exercise, as owner
or holder of any securities, all rights, powers and privileges in respect
thereof; and to do any and all acts and things for the preservation,
protection, improvement and enhancement in value of any and all such
securities, financial instruments or other assets.
(b) To acquire all or any part of the goodwill, rights, property, real
estate, interests in real estate and business of any person, firm,
association or corporation heretofore or hereafter engaged in any business
similar to any business which the Trust has the power to conduct, and to
hold, utilize, enjoy and in any manner dispose of the whole or any part of
the rights, property, real estate, interests in real estate and business so
acquired, and to assume in connection therewith any liabilities of any such
person, firm, association or corporation.
(c) To apply for, obtain, purchase or otherwise acquire, any patents,
copyrights, licenses, trademarks, trade names and the like, which may seem
capable of being used for any of the purposes of the Trust; and to use,
exercise, develop, grant licenses in respect of, sell and otherwise turn to
account, the same.
(d) To issue and sell shares of beneficial interest, securities convertible
into such shares of beneficial interest, or other security or evidence of
indebtedness, in such amounts and on such terms and conditions, for such
purposes and for such amount or kind of consideration (including, without
limitation thereto, securities) now or hereafter permitted by the laws of the
State of Delaware, by the 1940 Act, and by this Declaration of Trust, as the
Board of Trustees may determine.
(e) To purchase or otherwise acquire, hold, dispose of, resell, transfer,
reissue or cancel (all without the vote of the Shareholders) shares of
beneficial interest in any manner and to the extent now or hereafter
permitted by the laws of the State of Delaware, by the 1940 Act and by this
Declaration of Trust.
(f) To conduct its business in all its branches at one or more offices in
Delaware and elsewhere in any part of the world, without restriction, or
limit as to extent.
(g) To exercise and enjoy, in Delaware and in any other states, territories,
districts and United States dependencies and in foreign countries, all of the
powers, rights and privileges granted to, or conferred upon, statutory trusts
by the DSTA now or hereafter in force, and the enumeration of the foregoing
powers shall not be deemed to exclude any powers, rights or privileges so
granted or conferred.
(h) In general, to carry on any other business in connection with or
incidental to its trust purposes, to do everything necessary, suitable or
proper for the accomplishment of such purposes or for the attainment of any
object or the furtherance of any power hereinbefore set forth, either alone
or in association with others, to do every other act or thing incidental or
appurtenant to, or growing out of, or connected with, its business or
purposes, objects or powers, and, subject to the foregoing, to have and
exercise all the powers, rights and privileges conferred upon statutory
trusts by the laws of the State of Delaware as in force from time to time.
(i) The Trust shall not be limited to investing in obligations maturing
before the possible dissolution of the Trust. Neither the Trust nor the
Board of Trustees shall be required to obtain any court order to deal with
any Trust Property or take any other action hereunder.
(j) The foregoing objects and purposes shall, except as otherwise expressly
provided, be in no way limited or restricted by reference to, or inference
from, the terms of any other clause of this or any other Article of this
Declaration of Trust, and shall each be regarded as independent and construed
as a power as well as an object and a purpose, and the enumeration of
specific purposes, objects and powers shall not be construed to limit or
restrict in any manner the meaning of general terms or the general powers of
the Trust now or hereafter conferred by the laws of the State of Delaware,
nor shall the expression of one thing be deemed to exclude another, though it
be of like nature, not expressed.
ARTICLE III.
SHARES
Section 1..DIVISION OF BENEFICIAL INTEREST.
-------------------------------
(a) The beneficial interest in the Trust shall at all times be divided into
outstanding shares of the Trust, all without par value. The number of shares
of beneficial interest in the Trust authorized hereunder is unlimited.
(b) Subject to the 1940 Act and applicable law, the Board of Trustees shall
have the power to issue authorized but unissued shares of beneficial interest
in the Trust from time to time on such terms and for such consideration as
provided in Article III, Section 2. The Board of Trustees, on behalf of the
Trust, may acquire and hold as treasury shares, reissue for such
consideration and on such terms as it may determine, or cancel, at its
discretion from time to time, any Shares reacquired by the Trust.
(c) Each Share shall entitle the holder to the voting rights as provided in
Article V hereof.
(d) Subject to the preferences of any class of Shares then existing,
Shareholders shall be entitled to receive dividends and distributions, when,
if and as declared by the Board of Trustees. Dividends may be paid in cash
or in kind. All dividends and distributions from the Trust Property shall be
made ratably among all Shareholders of a class according to the number of
Shares of such class held of record by such Shareholders on the record date
for any dividend or distribution.
(e) Subject to any Board resolution establishing and designating a class of
Shares, Shareholders shall have no preemptive or other right to subscribe for
new or additional authorized, but unissued shares or other securities issued
by the Trust. The Board of Trustees may from time to time divide or combine
the Shares of any class into a greater or lesser number of Shares of such
class. Any such division or combination shall not materially change the
proportionate beneficial interest in Trust Property of Shareholders of such
class at the time of such division or combination or materially affect the
rights of Shareholders.
(f) Any Trustee, officer or other agent of the Trust, and any organization
in which any such Person has an economic or other interest, may acquire, own,
hold and dispose of shares of beneficial interest in the Trust, whether such
shares are authorized but unissued, or already outstanding, to the same
extent as if such Person were not a Trustee, officer or other agent of the
Trust; and the Trust may issue and sell and may purchase such Shares from any
such Person or any such organization, subject to the limitations,
restrictions or other provisions applicable to the sale or purchase of such
shares herein and the 1940 Act.
Section 2. SALE OF SHARES. The Trust may sell its authorized but unissued
shares of beneficial interest to such Persons, at such times, on such terms,
and for such consideration paid wholly or partly in cash or securities as the
Board of Trustees may from time to time authorize; provided, that (i) each
such sale shall be credited to the individual purchaser's account in the form
of full or fractional Shares, at the net asset value per Share, subject to
the 1940 Act, including, but not limited to, Section 23 of the 1940 Act, and
the rules and regulations adopted thereunder and (ii) the Board of Trustees
may, in its sole discretion, permit the Principal Underwriter to impose a
sales charge upon any such sale; and further provided, that each such sale
shall be subject to the 1940 Act, the rules and regulations adopted
thereunder and applicable law. Every Shareholder by virtue of having become
a Shareholder shall be deemed to have expressly assented and agreed to the
terms of this Declaration of Trust and to have become bound as a party hereto.
Section 3. STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY. Shares
shall be deemed to be personal property giving to Shareholders only the
rights provided in this Declaration of Trust, the By-Laws and under
applicable law. 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. The death,
incapacity, dissolution, termination, or bankruptcy of a Shareholder during
the existence of the Trust shall not operate to dissolve the Trust, nor
entitle the representative of any deceased, incapacitated, dissolved,
terminated or bankrupt Shareholder to an accounting or to take any action in
court or elsewhere against the Trust or the Trustees, but shall entitle such
representative only to the rights, as a Shareholder under this Declaration of
Trust and the By-Laws, of said deceased, incapacitated, dissolved, terminated
or bankrupt Shareholder. Neither the Trust nor the Trustees, nor any
officer, employee or agent of the Trust shall have any power to bind
personally any Shareholder, nor, except as specifically provided herein, to
call upon any Shareholder for the payment of any sum of money other than such
as the Shareholder may at any time personally agree to pay. Each Share, when
issued on the terms determined by the Board of Trustees, shall be fully paid
and nonassessable. As provided in the DSTA, Shareholders shall be entitled
to the same limitation of personal liability as that extended to stockholders
of a private corporation organized for profit under the General Corporation
Law of the State of Delaware.
Section 4. POWER OF BOARD OF TRUSTEES TO MAKE TAX STATUS ELECTION. The Board
of Trustees shall have the power, in its discretion, to make such elections
as to the tax status of the Trust as may be permitted or required under the
Code, without the vote of any Shareholder.
Section 5. SERIES AND CLASSES. The Board of Trustees may authorize the
division of Shares into separate and distinct series and classes of Shares.
The establishment and designation of any series or class thereof shall be
effective, without the requirement of Shareholder approval, upon the adoption
of a resolution by not less than a majority of the Board of Trustees, which
resolution shall set forth such establishment and designation and may
provide, to the extent permitted by the DST and subject to the rights of any
class of preferred Shares hereafter created, for rights, powers, preferences,
terms and duties of such series or class thereof otherwise than as provided
herein. Each such resolution shall be incorporated herein by reference upon
adoption. Any such resolution may be amended by a further resolution of a
majority of the Board of Trustees, and if Shareholder approval would be
required to make such an amendment to the language set forth in this
Declaration of Trust, such further resolution shall require the same
Shareholder approval that would be necessary to make such amendment to the
language set forth in this Declaration of Trust. Each such further
resolution shall be incorporated herein by reference upon adoption.
Section 6. INDEMNIFICATION OF SHAREHOLDERS. If any Shareholder or former
Shareholder shall be exposed to liability by reason of a claim or demand
relating exclusively to his or her being or having been a Shareholder and not
because of such Shareholder's actions or omissions, such Shareholder or
former Shareholder (or, in the case of a natural person, his or her heirs,
executors, administrators, or other legal representatives or, in the case of
a corporation or other entity, its corporate or other general successor)
shall be entitled to be held harmless from and indemnified out of the assets
of the Trust against all loss and expense arising from such claim or demand;
provided, however, such indemnity shall not cover (i) any taxes due or paid
by reason of such Shareholder's ownership of any Shares and (ii) expenses
charged to a Shareholder pursuant to Article IV, Section 5 hereof.
ARTICLE IV.
THE BOARD OF TRUSTEES
Section 1. NUMBER, CLASSES AND ELECTION, TERM, REMOVAL AND RESIGNATION.
-----------------------------------------------------------
(a) The initial Board of Trustees shall be comprised of the Trustee who
first entered into the Original Declaration. The initial Trustee shall
execute and file or cause to be filed the Certificate of Trust with the
office of the Secretary of State of the State of Delaware and shall execute a
consent in writing to adopt the By-Laws of the Trust. Such initial Trustee
shall thereafter approve and adopt a resolution, prior to the election of a
Board of Trustees by the initial Shareholder pursuant to paragraph (c) of
this Section 1: (i) fixing the number of Trustees constituting the entire
Board of Trustees and dividing such Board of Trustees into three (3) classes,
with the term of office of each class expiring upon the earlier of: (1) the
end of its term set forth in paragraph (c) of this Section 1, as though the
appointment set forth in (ii) below by the initial Trustee were the election
by written consent of the initial Shareholder described in paragraph (c) of
this Section 1; or (2) the election of a successor Board of Trustees by the
initial Shareholder pursuant to paragraph (c) of this Section 1; and (ii)
appointing Trustees to fill any vacancies. If the initial Trustee determines
to resign upon the appointment by the initial Trustee of the Trustees to fill
the vacancies described in this paragraph, such resignation shall be
effective upon the appointment of such Trustees.
(b) The number of Trustees constituting the entire Board of Trustees may be
fixed from time to time by the vote of a majority of the then Board of
Trustees; PROVIDED, HOWEVER, that the number of Trustees shall in no event be
less than three (3) nor more than fifteen (15) and the percentage of Trustees
who are not Interested Persons of the Trust shall be no less than that
permitted by the 1940 Act. The number of Trustees shall not be reduced so as
to shorten the term of any Trustee then in office. Upon a person's election
or appointment as Trustee, such person shall execute a counterpart to this
Declaration of Trust.
(c) The Board of Trustees shall be divided into three (3) classes, with the
term of office of one class expiring each year. Upon the written consent of
the initial Shareholder, Trustees of the first class shall be elected to hold
office for a term expiring at the next succeeding annual meeting at the time
such Trustees' successors are elected and qualified; Trustees of the second
class shall be elected to hold office for a term expiring at the second
succeeding annual meeting at the time such Trustees' successors are elected
and qualified; and Trustees of the third class shall be elected to hold
office for a term expiring at the third succeeding annual meeting at the time
such Trustees' successors are elected and qualified.
(d) Thereafter, at each annual meeting of Shareholders, the successors to
the class of Trustees whose term shall then expire shall be elected to hold
office for a term expiring at the third succeeding annual meeting at the time
such Trustees' successors are elected and qualified; provided that the
Trustees may also determine by resolution those Trustees in each class that
shall be nominated and elected by Shareholders of a particular class of
Shares (e.g., by a class of preferred Shares issued by the Fund) prior to the
initial public offering of such class of Shares. Only persons who are
nominated in accordance with the procedures set forth in the By-Laws shall be
eligible for election as Trustees and no proposal to nominate Trustees shall
be brought before a meeting of Shareholders or otherwise transacted unless in
accordance with the procedures set forth in the By-Laws, except as may be
otherwise provided in any Board resolution establishing and designating a
class of preferred Shares.
(e) Each Trustee shall hold office for the term set forth in the applicable
paragraph of this Section 1 or until such Trustee's earlier death,
resignation, removal or inability otherwise to serve.
(f) Except as may be otherwise provided in any Board resolution establishing
and designating a class of Shares, any Trustee may be removed for cause by
the Shareholders, upon the vote of the holders of 75% of the Shares entitled
to vote. "Cause" for these purposes shall require willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of such Trustee.
(g) Any Trustee may resign at any time by giving written notice to the
secretary of the Trust or to a meeting of the Board of Trustees. Except as
set forth in paragraph (a) of this Section 1 with respect to the initial
Trustee, such resignation shall be effective upon receipt, unless specified
to be effective at some later time, but no later than the next succeeding
annual meeting of Shareholders.
Section 2. TRUSTEE ACTION BY WRITTEN CONSENT WITHOUT A MEETING. Except as
otherwise required by applicable law, any action that may be taken at any
meeting of the Board of Trustees or any committee thereof may be taken
without a meeting and without prior written notice if a consent or consents
in writing setting forth the action so taken is signed by the Trustees having
not less than the minimum number of votes that would be necessary to
authorize or take that action at a meeting at which all Trustees on the Board
of Trustees or any committee thereof, as the case may be, were present and
voted. A consent transmitted by electronic transmission (as defined in the
DSTA) by a Trustee shall be deemed to be written and signed for purposes of
this Section. All such consents shall be filed with the secretary of the
Trust and shall be maintained in the Trust's records.
Section 3. POWERS; OTHER BUSINESS INTERESTS; QUORUM AND REQUIRED VOTE.
(a) POWERS. Subject to the provisions of this Declaration of Trust,
the business of the Trust shall be managed by or under the direction of the
Board of Trustees, and such Board of Trustees shall have all powers necessary
or convenient to carry out that responsibility. The Board of 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 it may consider necessary or
appropriate in connection with the operation and administration of the
Trust. The Board of Trustees shall not be bound or limited by present or
future laws or customs with regard to investments by trustees or fiduciaries,
but, subject to the other provisions of this Declaration of Trust and the
By-Laws, shall have full authority and absolute power and control over the
assets and the business of the Trust to the same extent as if the Board of
Trustees was the sole owner of such assets and business in its own right,
including such authority, power and control to do all acts and things as it,
in its sole discretion, shall deem proper to accomplish the purposes of this
Trust. Without limiting the foregoing, the Board of Trustees may, subject to
the requisite vote for such actions as set forth in this Declaration of Trust
and the By-Laws: (1) adopt By-Laws not inconsistent with applicable law or
this Declaration of Trust; (2) amend, restate and repeal such By-Laws,
subject to and in accordance with the provisions of such By-Laws; (3) fill
vacancies on the Board of Trustees in accordance with this Declaration of
Trust and the By-Laws; (4) elect and remove such officers and appoint and
terminate such agents as it considers appropriate, in accordance with this
Declaration of Trust and the By-Laws; (5) establish and terminate one or more
committees of the Board of Trustees pursuant to the By-Laws; (6) place Trust
Property in custody as required by the 1940 Act, employ one or more
custodians of the Trust Property and authorize such custodians to employ
sub-custodians and to place all or any part of such Trust property with a
custodian or a custodial system meeting the requirements of the 1940 Act; (7)
retain a transfer agent, dividend disbursing agent, a shareholder servicing
agent or administrative services agent, or any number thereof or any other
service provider as deemed appropriate; (8) provide for the issuance and
distribution of shares of beneficial interest in the Trust or other
securities or financial instruments directly or through one or more Principal
Underwriters or otherwise; (9) retain one or more Investment Adviser(s); (10)
repurchase Shares on behalf of the Trust and transfer Shares pursuant to
applicable law; (11) set record dates for the determination of Shareholders
with respect to various matters, in the manner provided in Article V, Section
4 of this Declaration of Trust; (12) declare and pay dividends and
distributions to Shareholders from the Trust Property, in accordance with
this Declaration of Trust and the By-Laws; (13) to the extent necessary to
give effect to the rights, powers and preferences of any series or class
established and designated, allocate assets and liabilities of the Trust to a
particular series or class or apportion the same among two or more series or
classes; and (14) in general delegate such authority as it considers
desirable to any officer of the Trust, to any committee of the Trust and to
any agent or employee of the Trust or to any such custodian, transfer,
dividend disbursing, shareholder servicing agent, Principal Underwriter,
Investment Adviser, or other service provider, to the extent authorized and
in accordance with this Declaration of Trust, the By-Laws and applicable
law. The powers of the Board of Trustees set forth in this Section 3(a) are
without prejudice to the other powers of the Board of Trustees set forth in
this Declaration of Trust and the By-Laws. Any determination as to what is
in the best interests of the Trust and its Shareholders made by the Board of
Trustees in good faith shall be conclusive. In construing the provisions of
this Declaration of Trust, the presumption shall be in favor of a grant of
power to the Board of Trustees.
(b) OTHER BUSINESS INTERESTS. The Trustees shall devote to the affairs of
the Trust such time as may be necessary for the proper performance of their
duties hereunder, but neither the Trustees nor the officers, directors,
shareholders, partners or employees of the Trustees, if any, shall be
expected to devote their full time to the performance of such duties. The
Trustees, or any Affiliate, shareholder, officer, director, partner or
employee thereof, or any Person owning a legal or beneficial interest
therein, may engage in, or possess an interest in, any business or venture
other than the Trust, of any nature and description, independently or with or
for the account of others. Neither the Trust nor any Shareholder shall have
the right to participate or share in such other business or venture or any
profit or compensation derived therefrom.
(c) QUORUM AND REQUIRED VOTE. At all meetings of the Board of Trustees, a
majority of the Board of Trustees shall be present in person in order to
constitute a quorum for the transaction of business. A meeting at which a
quorum is initially present may continue to transact business notwithstanding
the departure of Trustees from the meeting, if any action taken is approved
by at least a majority of the required quorum for that meeting. Subject to
Article III, Sections 1 and 6 of the By-Laws and except as otherwise provided
herein or required by applicable law, the vote of not less than a majority of
the Trustees present at a meeting at which a quorum is present shall be the
act of the Board of Trustees.
Section 4. PAYMENT OF EXPENSES BY THE TRUST. An authorized officer of the
Trust shall pay or cause to be paid out of the principal or income of the
Trust, or partly out of the principal and partly out of the income of the
Trust, all expenses, fees, charges, taxes and liabilities incurred by or
arising in connection with the maintenance or operation of the Trust, or in
connection with the management thereof, including, but not limited to, the
Trustees' compensation and such expenses, fees, charges, taxes and
liabilities associated with the services of the Trust's officers, employees,
Investment Adviser(s), Principal Underwriter, auditors, counsel, custodian,
sub-custodian, transfer agent, dividend disbursing agent, shareholder
servicing agent, and such other agents or independent contractors and such
other expenses, fees, charges, taxes and liabilities as the Board of Trustees
may deem necessary or proper to incur.
Section 5. PAYMENT OF EXPENSES BY SHAREHOLDERS. The Board of Trustees shall
have the power, as frequently as it may determine, to cause any Shareholder
to pay directly, in advance or arrears, for charges of the Trust's custodian
or transfer, dividend disbursing, shareholder servicing or similar agent for
services provided to such Shareholder, an amount fixed from time to time by
the Board of Trustees, by setting off such amount due from such Shareholder
from the amount of (i) declared but unpaid dividends or distributions owed
such Shareholder, or (ii) proceeds from the repurchase by the Trust of Shares
from such Shareholder pursuant to Article VI hereof.
Section 6. OWNERSHIP OF TRUST PROPERTY. Legal title to all of the Trust
Property shall at all times be vested in the Trust, except that the Board of
Trustees shall have the power to cause legal title to any Trust Property to
be held by or in the name of any Person as nominee, on such terms as the
Board of Trustees may determine, in accordance with applicable law.
Section 7. SERVICE CONTRACTS.
-----------------
(a) Subject to this Declaration of Trust, the By-Laws and the 1940 Act, the
Board of Trustees may, at any time and from time to time, contract for
exclusive or nonexclusive investment advisory or investment management
services for the Trust with any corporation, trust, association or other
organization, including any Affiliate; and any such contract may contain such
other terms as the Board of Trustees may determine, including without
limitation, delegation of authority to the Investment Adviser to determine
from time to time without prior consultation with the Board of Trustees what
securities and other instruments or property shall be purchased or otherwise
acquired, owned, held, invested or reinvested in, sold, exchanged,
transferred, mortgaged, pledged, assigned, negotiated, or otherwise dealt
with or disposed of, and what portion, if any, of the Trust Property shall be
held uninvested and to make changes in the Trust's investments, or to engage
in such other activities, including administrative services, as may
specifically be delegated to such party.
(b) Subject to this Declaration of Trust, the By-Laws and the 1940 Act, the
Board of Trustees may also, at any time and from time to time, contract with
any Person, including any Affiliate, appointing it or them as the exclusive
or nonexclusive placement agent, distributor or Principal Underwriter for the
Trust's shares of beneficial ownership or for other securities or financial
instruments to be issued by the Trust, or appointing it or them to act as the
administrator, custodian, transfer agent, dividend disbursing agent and/or
shareholder servicing agent for the Trust.
(c) Subject to this Declaration of Trust, the By-Laws and the 1940 Act, the
Board of Trustees is further empowered, at any time and from time to time, to
contract with any Persons to provide such other services to the Trust as the
Board of Trustees determines to be in the best interests of the Trust and its
Shareholders.
(d) None of the following facts or circumstances shall affect the validity
of any of the following contracts or disqualify any Shareholder, Trustee,
employee or officer of the Trust from voting upon or executing the same, or
create any liability or accountability to the Trust or the Shareholders,
provided that the establishment of and performance of each such contract is
permissible under the 1940 Act, and provided further that such Person is
authorized to vote upon such contract under the 1940 Act:
(i) the fact that any of the Shareholders, Trustees, employees
or officers of the Trust is a shareholder, director,
officer, partner, trustee, employee, manager, Adviser,
placement agent, Principal Underwriter, distributor, or
Affiliate or agent of or for any Person, or for any parent
or Affiliate of any Person, with which any type of service
contract provided for in this Article IV, Section 7 may
have been or may hereafter be made, or that any such
Person, or any parent or Affiliate thereof, is a
Shareholder or has an interest in the Trust, or
(ii) the fact that any Person with which any type of service
contract provided for in this Article IV, Section 7 may
have been or may hereafter be made also has such a service
contract with one or more other Persons, or has other business
or interests.
(e) Every contract referred to in this Section 7 is required to comply with
this Declaration of Trust, the By-Laws, the 1940 Act, other applicable law
and any stipulation by resolution of the Board of Trustees.
ARTICLE V.
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 1..VOTING POWERS. The Shareholders shall have the power to vote only
(i) for the election of Trustees and the filling of any vacancies on the
Board of Trustees as set forth herein and in the By-Laws; (ii) for the
removal of Trustees as set forth herein; (iii) on such additional matters as
may be required by this Declaration of Trust, the By-Laws, the 1940 Act,
other applicable law and any registration statement of the Trust filed with
the Commission, the registration of which is effective; and (iv) on such
other matters as the Board of Trustees may consider necessary or desirable.
The Shareholder of record (as of the record date established pursuant to
Section 4 of this Article V) of each Share shall be entitled to one vote for
each full Share, and a fractional vote for each fractional Share.
Shareholders shall not be entitled to cumulative voting in the election of
Trustees or on any other matter.
Section 2..QUORUM AND REQUIRED VOTE.
------------------------
(a) Subject to any Board resolution establishing and designating a class of
Shares, a majority of the Shares entitled to vote at a Shareholders' meeting,
which are present in person or represented by proxy, shall constitute a
quorum at the Shareholders' meeting, except when a larger quorum is required
by applicable law or the requirements of any securities exchange on which
Shares are listed for trading, in which case such quorum shall comply with
such requirements. Abstentions and broker non-votes will be included for
purposes of determining whether a quorum is present. Subject to any
provision of this Declaration of Trust, the By-Laws, any Board resolution
establishing and designating a class of Shares or applicable law that
requires a different vote: (1) in all matters other than the election of
Trustees, the affirmative "vote of a majority of the outstanding voting
securities" (as defined herein) of the Trust entitled to vote at a
Shareholders' meeting at which a quorum is present, shall be the act of the
Shareholders; and (2) Trustees shall be elected by not less than a plurality
of the votes cast of the holders of Shares entitled to vote present in person
or represented by proxy at a Shareholders' meeting at which a quorum is
present. If any matter affects only the interests of some but not all
classes then existing, then only the Shareholders of such affected classes
shall be entitled to vote on the matter, in which case this paragraph shall
apply to a vote at a meeting of such class with such changes in the context
hereof as are necessary to substitute the class and its Shares or
Shareholders for the Trust and its Shares or Shareholders.
(b) Abstentions and broker non-votes will be treated as votes present at a
Shareholders' meeting, but will not be treated as votes cast. Abstentions
and broker non-votes, therefore, will have no effect on proposals which
require a plurality or majority of votes cast for approval, but will have the
same effect as a vote "against" on proposals requiring any percentage of the
outstanding voting securities of the Trust for approval.
Section 3. SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING. Any
action which may be taken at any meeting of Shareholders may be taken without
a meeting and without prior notice if a consent or consents in writing
setting forth the action so taken is signed by the holders of all Shares
entitled to vote on that action and is received by the secretary of the
Trust. A consent transmitted by electronic transmission (as defined in the
DSTA) by a Shareholder or by a person or persons authorized to act for a
Shareholder shall be deemed to be written and signed for purposes of this
Section. All such consents shall be filed with the secretary of the Trust
and shall be maintained in the Trust's records. Any Shareholder that has
given a written consent or the Shareholder's proxyholder or a personal
representative of the Shareholder or its respective proxyholder may revoke
the consent by a writing received by the secretary of the Trust before the
written consents of all Shares entitled to vote have been received by the
secretary of the Trust. If any matter affects only the interests of some but
not all classes then existing, then only the Shareholders of such affected
classes shall be entitled to vote on the matter, in which case this paragraph
shall apply to a consent in writing of such class with such changes in the
context hereof as are necessary to substitute the class and its Shares or
Shareholders for the Trust and its Shares or Shareholders.
Section 4. RECORD DATES.
------------
(a) For purposes of determining the Shareholders entitled to notice of, and
to vote at, any meeting of Shareholders, the Board of Trustees may fix a
record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board of Trustees, and
which record date shall not be more than one hundred twenty (120) days nor
less than ten (10) days before the date of any such meeting. For purposes of
determining the Shareholders entitled to vote on any action without a
meeting, the Board of Trustees may fix a record date, which record date shall
not precede the date upon which the resolution fixing the record date is
adopted by the Board of Trustees, and which record date shall not be more
than thirty (30) days after the date upon which the resolution fixing the
record date is adopted by the Board of Trustees.
(b) If the Board of Trustees does not so fix a record date:
(i) the record date for determining Shareholders entitled to notice
of, and to vote at, a meeting of Shareholders shall be at the
close of business on the day next preceding the day on which
notice is given or, if notice is waived, at the close of
business on the day next preceding the day on which the
meeting is held.
(ii) the record date for determining Shareholders entitled to vote
on any action by consent in writing without a meeting of
Shareholders, (1) when no prior action by the Board of
Trustees has been taken, shall be the day on which the first
signed written consent setting forth the action taken is
delivered to the Trust, or (2) when prior action of the
Board of Trustees has been taken, shall be at the close of
business on the day on which the Board of Trustees adopts
the resolution taking such prior action.
(c) For the purpose of determining the Shareholders who are entitled to
receive payment of any dividend or of any other distribution of assets of the
Trust, the Board of Trustees may from time to time fix a record date, which
record date shall not precede the date upon which the resolution fixing the
record date is adopted, and which record date shall not be more than sixty
(60) days before the date for the payment of such dividend or such other
distribution.
Section 5. ADDITIONAL PROVISIONS. The By-Laws may include further provisions
for Shareholders' votes, meetings and related matters.
ARTICLE VI.
NET ASSET VALUE; DISTRIBUTIONS; REPURCHASES; TRANSFERS
Section 1..DETERMINATION OF NET ASSET VALUE, NET INCOME AND DISTRIBUTIONS.
--------------------------------------------------------------
(a) The Board of Trustees shall have the power to determine from time to
time the offering price for authorized, but unissued, shares of beneficial
interest of the Trust, subject to any requirements or limitations of the 0000
Xxx.
(b) The Board of Trustees may, subject to the 1940 Act, prescribe and shall
set forth in the By-Laws, this Declaration of Trust or in a resolution of the
Board of Trustees such bases and time for determining the net asset value per
Share, or net income attributable to the Shares or, after providing for
actual and accrued expenses and liabilities (including such reserves as the
Board of Trustees may establish) determined in accordance with good
accounting practices and subject to the preferences of any class of Shares
then existing, the declaration and payment of dividends and distributions on
the Shares, as it may deem necessary or desirable.
(c) Before payment of any dividend there may be set aside out of any funds
of the Trust available for dividends such sum or sums as the Board of
Trustees may from time to time, in its absolute discretion, think proper as a
reserve fund to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the Trust or for such other lawful
purpose as the Board of Trustees shall deem to be in the best interests of
the Trust and its Shareholders, and the Board of Trustees may abolish any
such reserve in the manner in which it was created.
Section 2..REPURCHASE OF SHARES WITH SHAREHOLDER CONSENT.
---------------------------------------------
(a) The Trust may repurchase Shares on the open market or such Shares as are
tendered by any Shareholder for repurchase pursuant to a repurchase offer or
tender offer, if any, made by the Trust periodically or from time to time,
upon the presentation by the Shareholder of a proper instrument of transfer
together with a request directed to the Trust, its transfer agent or other
duly authorized agent, that the Trust repurchase such Shares, or in
accordance with such other procedures for repurchase as the Board of Trustees
may from time to time authorize; and the Trust will pay therefore a price
that meets the requirements of Section 23 of the 1940 Act, and the rules and
regulations adopted thereunder, and that is in accordance with the terms of
such repurchase offer, tender offer, this Declaration of Trust, the By-Laws
and other applicable law. The obligations set forth in this Section 2 are
subject to the provision that such obligations may be suspended or postponed
by the Board of Trustees (1) during any time the New York Stock Exchange (the
"Exchange") is closed for other than weekends or holidays; (2) if permitted
by the rules of the Commission, during periods when trading on the Exchange
is restricted; or (3) during any National Financial Emergency. The Board of
Trustees may, in its discretion, declare that the suspension relating to a
National Financial Emergency shall terminate, as the case may be, on the
first business day on which the Exchange shall have reopened or the period
specified above shall have expired (as to which, in the absence of an
official ruling by the Commission, the determination of the Board of Trustees
shall be conclusive.)
(b) The repurchase price may in any case or cases be paid wholly or partly
in kind if the Board of Trustees determines that such payment is advisable in
the interest of the remaining Shareholders. Subject to the foregoing, the
fair value, selection and quantity of securities or other property so paid or
delivered as all or part of the repurchase price shall be determined by or
under authority of the Board of Trustees. In no case shall the Trust be
liable for any delay of any corporation or other Person in transferring
securities or other property selected for delivery as all or part of any
payment in kind.
Section 3. REPURCHASE OF SHARES WITHOUT SHAREHOLDER CONSENT. The Trust shall
have the right at its option and at any time, subject to the 1940 Act and
other applicable law, to repurchase Shares of any Shareholder at a price that
meets the requirements of Section 23 of the 1940 Act, and the rules and
regulations adopted thereunder, and that is in accordance with the terms of
this Declaration of Trust, the By-Laws and other applicable law: (a) if at
such time, such Shareholder owns Shares having an aggregate net asset value
of less than an amount determined from time to time by the Trustees; or (b)
to the extent that such Shareholder owns Shares equal to or in excess of a
percentage of the Shares determined from time to time by the Trustees.
Section 4. TRANSFER OF SHARES. Shares shall be transferable in accordance
with the provisions of the By-Laws.
ARTICLE VII.
LIMITATION OF LIABILITY
AND INDEMNIFICATION OF AGENT
Section 1..LIMITATION OF LIABILITY.
-----------------------
(a) For the purpose of this Article, "Agent" means any Person who is or was
a Trustee, officer, employee or other agent of the Trust or is or was serving
at the request of the Trust as a trustee, director, officer, employee or
other agent of another foreign or domestic corporation, partnership, joint
venture, trust or other enterprise; "Proceeding" means any threatened,
pending or completed action or proceeding, whether civil, criminal,
administrative or investigative; and "Expenses" include without limitation
attorneys' fees and any expenses of establishing a right to indemnification
under this Article.
(b) An Agent shall be liable to the Trust and to any Shareholder solely for
such Agent's own willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of such Agent (such conduct
referred to herein as "Disqualifying Conduct"), and for nothing else.
(c) Subject to subsection (b) of this Section 1 and to the fullest extent
that limitations on the liability of Agents are permitted by the DSTA, the
Agents shall not be responsible or liable in any event for any act or
omission of any other Agent of the Trust or any Investment Adviser or
Principal Underwriter of the Trust.
(d) No Agent, when acting in its respective capacity as such, shall be
personally liable to any Person, other than the Trust or a Shareholder to the
extent provided in subsections (b) and (c) of this Section 1, for any act,
omission or obligation of the Trust or any Trustee thereof.
(e) The officers and Trustees may obtain the advice of counsel or other
experts with respect to the meaning and operation of this Declaration of
Trust, the By-Laws, applicable law and their respective duties as officers or
Trustees. No such officer or Trustee shall be liable for any act or omission
in accordance with such advice and no inference concerning liability shall
arise from a failure to follow such advice. The officers and Trustees shall
not be required to give any bond hereunder, nor any surety if a bond is
required by applicable law.
(f) The failure to make timely collection of dividends or interest, or to
take timely action with respect to entitlements, on the Trust's securities
issued in emerging countries, shall not be deemed to be negligence or other
fault on the part of any Agent, and no Agent shall have any liability for
such failure or for any loss or damage resulting from the imposition by any
government of exchange control restrictions which might affect the liquidity
of the Trust's assets or from any war or political act of any foreign
government to which such assets might be exposed, except, in the case of a
Trustee or officer, for liability resulting from such Trustee's or officer's
Disqualifying Conduct.
(g) The limitation on liability contained in this Article applies to events
occurring at the time a Person serves as an Agent whether or not such Person
is an Agent at the time of any Proceeding in which liability is asserted.
(h) No amendment or repeal of this Article shall adversely affect any right
or protection of an Agent that exists at the time of such amendment or repeal.
Section 2. INDEMNIFICATION.
---------------
(a) INDEMNIFICATION BY TRUST. The Trust shall indemnify, out of Trust
Property, to the fullest extent permitted under applicable law, any Person
who was or is a party or is threatened to be made a party to any Proceeding
by reason of the fact that such Person is or was an Agent of the Trust,
against Expenses, judgments, fines, settlements and other amounts actually
and reasonably incurred in connection with such Proceeding if such Person
acted in good faith or in the case of a criminal proceeding, had no
reasonable cause to believe the conduct of such Person was unlawful. The
termination of any Proceeding by judgment, order, settlement, conviction or
plea of nolo contendere or its equivalent shall not of itself create a
presumption that the Person did not act in good faith or that the Person had
reasonable cause to believe that the Person's conduct was unlawful.
(b) EXCLUSION OF INDEMNIFICATION. Notwithstanding any provision to the
contrary contained herein, there shall be no right to indemnification for any
liability arising by reason of the Agent's Disqualifying Conduct. In respect
of any claim, issue or matter as to which that Person shall have been
adjudged to be liable in the performance of that Person's duty to the Trust
or the Shareholders indemnification shall be made only to the extent that the
court in which that action was brought shall determine, upon application or
otherwise, that in view of all the circumstances of the case, that Person was
not liable by reason of that Person's Disqualifying Conduct.
(c) REQUIRED APPROVAL. Any indemnification under this Article shall be made
by the Trust if authorized in the specific case on a determination that
indemnification of the Agent is proper in the circumstances by a majority
vote of Trustees, even though such number of Trustees shall be less than a
quorum, who are not parties to the Proceeding and have no economic or other
interest in connection with such specific case; a committee of such Trustees
designated by majority vote of such Trustees even though such number of
Trustees shall be less than a quorum; or by independent legal counsel in a
written opinion.
(d) ADVANCEMENT OF EXPENSES. Expenses incurred by an Agent in defending any
Proceeding may be advanced by the Trust before the final disposition of the
Proceeding on receipt of an undertaking by or on behalf of the Agent to repay
the amount of the advance if it shall be determined ultimately that the Agent
is not entitled to be indemnified as authorized in this Article.
(e) OTHER CONTRACTUAL RIGHTS. Nothing contained in this Article shall
affect any right to indemnification to which Persons other than Trustees and
officers of the Trust or any subsidiary thereof may be entitled by contract
or otherwise.
(f) FIDUCIARIES OF EMPLOYEE BENEFIT PLAN. This Article does not apply to
any Proceeding against any trustee, investment manager or other fiduciary of
an employee benefit plan in that Person's capacity as such, even though that
Person may also be an Agent of the Trust as defined in Section 1 of this
Article. Nothing contained in this Article shall limit any right to
indemnification to which such a trustee, investment manager, or other
fiduciary may be entitled by contract or otherwise which shall be enforceable
to the extent permitted by applicable law other than this Article.
Section 3. INSURANCE. To the fullest extent permitted by applicable law, the
Board of Trustees shall have the authority to purchase with Trust Property,
insurance for liability and for all Expenses reasonably incurred or paid or
expected to be paid by an Agent in connection with any Proceeding in which
such Agent becomes involved by virtue of such Agent's actions, or omissions
to act, in its capacity or former capacity with the Trust, whether or not the
Trust would have the power to indemnify such Agent against such liability.
Section 4. DERIVATIVE ACTIONS. Subject to the requirements set forth in
Section 3816 of the DSTA, a Shareholder or Shareholders may bring a
derivative action on behalf of the Trust only if (i) the Shareholder or
Shareholders first make a pre-suit demand upon the Board of Trustees to bring
the subject action unless an effort to cause the Board of Trustees to bring
such action is excused; and (ii) holders of a majority of the Shares join in
the bringing of such action. A demand on the Board of Trustees shall only be
excused if a majority of the Board of Trustees, or a majority of any
committee established to consider the merits of such action, has a material
personal financial interest in the action at issue. A Trustee shall not be
deemed to have a material personal financial interest in an action or
otherwise be disqualified from ruling on a Shareholder demand by virtue of
the fact that such Trustee receives remuneration from his service on the
Board of Trustees of the Trust or on the boards of one or more investment
companies with the same or an affiliated investment advisor or underwriter.
ARTICLE VIII.
APPROVAL OF CERTAIN TRANSACTIONS
Section 1. VOTE REQUIRED. Notwithstanding any other provision of this
Declaration of Trust to the contrary and subject to the exceptions provided
in this Article VIII, each of the transactions described in this Article VIII
(other than Section 2 of this Article VIII with respect to dissolution and
termination) shall require the approval of the Board of Trustees and the
affirmative vote of the holders of 75% of the Shares entitled to vote to
approve, adopt or authorize such transaction unless such action has been
previously approved, adopted or authorized by the affirmative vote of
two-thirds (66 2/3%) of the Board of Trustees, in which case the Shareholder
vote set forth in Article V, Section 2(a)(1) shall be required. If any
matter affects only the interests of some but not all classes then existing,
then only the Shareholders of such affected classes shall be entitled to vote
on the matter, in which case this paragraph shall apply to a vote at a
meeting of such class with such changes in the context hereof as are
necessary to substitute the class and its Shares or Shareholders for the
Trust and its Shares or Shareholders.
Section 2..DISSOLUTION AND TERMINATION.
---------------------------
(a) The Trust shall have perpetual existence unless dissolved upon:
(i) The vote of the Board of Trustees; or
(ii) The occurrence of a dissolution or termination event pursuant
to anyother provision of this Declaration of Trust or the
DSTA.
(b) Each class hereafter created shall have perpetual existence
unless terminated upon:
(i) The vote of the Board of Trustees;
(ii) The occurrence of a termination event pursuant to any
other provision of this Declaration of Trust, the DSTA or
the occurrence of a termination event pursuant to any
Board resolution establishing and designating such class;
or
(iii) Any event that causes the dissolution of the Trust.
(c) Upon dissolution of the Trust, the Board of Trustees shall (in
accordance with Section 3808 of the DSTA) pay or make reasonable provision
to pay all claims and obligations of the Trust, including all contingent,
conditional or unmatured claims and obligations known to the Trust, and all
claims and obligations which are known to the Trust, but for which the
identity of the claimant is unknown. If the Trust has sufficient assets,
such claims and obligations shall be paid in full and any such provisions
for payment shall be made in full. If the Trust has insufficient assets,
such claims and obligations shall be paid or provided for according to
their priority and, among claims and obligations of equal priority, ratably
to the extent of assets available therefore. Any remaining assets
(including, without limitation, cash, securities or any combination
thereof) shall be distributed to the Shareholders ratably according to the
number of Shares held of record by the several Shareholders on the record
date for such dissolution distribution, subject to any then existing
preferential rights of Shares. Upon the winding up of the Trust in
accordance with Section 3808 of the DSTA and its termination, any one (1)
Trustee shall execute, and cause to be filed, a certificate of
cancellation, with the office of the Secretary of State of the State of
Delaware in accordance with the provisions of Section 3810 of the DSTA.
Section 3. MERGER OR CONSOLIDATION; CONVERSION; REORGANIZATION.
---------------------------------------------------
(a) MERGER OR CONSOLIDATION. Pursuant to an agreement of merger or
consolidation, the Board of Trustees may cause the Trust to merge or
consolidate with or into one or more statutory trusts or "other business
entities" (as defined in Section 3801 of the DSTA) formed or organized or
existing under the laws of the State of Delaware or any other state or the
United States or any foreign country or other foreign jurisdiction. Any such
merger or consolidation shall require approval by vote of the Board of
Trustees and Shareholders as set forth in Section 1 of this Article VIII. By
reference to Section 3815(f) of the DSTA, any agreement of merger or
consolidation approved in accordance with this Section 3(a) may, without a
Shareholder vote, unless required by the 1940 Act or the requirements of any
securities exchange on which Shares are listed for trading, effect any
amendment to this Declaration of Trust or the By-Laws or effect the adoption
of a new governing instrument if the Trust is the surviving or resulting
statutory trust in the merger or consolidation, which amendment or new
governing instrument shall be effective at the effective time or date of the
merger or consolidation. In all respects not governed by the DSTA, the 1940
Act or other applicable law, the Board of Trustees shall have the power to
prescribe additional procedures necessary or appropriate to accomplish a
merger or consolidation, including the power to create one or more separate
statutory trusts to which all or any part of the assets, liabilities, profits
or losses of the Trust may be transferred and to provide for the conversion
of Shares into beneficial interests in such separate statutory trust or
trusts. Upon completion of the merger or consolidation, if the Trust is the
surviving or resulting statutory trust, any one (1) Trustee shall execute,
and cause to be filed, a certificate of merger or consolidation in accordance
with Section 3815 of the DSTA.
(b) CONVERSION. The Board of Trustees may cause (i) the Trust to convert
to an "other business entity" (as defined in Section 3801 of the DSTA) formed
or organized under the laws of the State of Delaware as permitted pursuant to
Section 3821 of the DSTA; (ii) the Shares to be converted into beneficial
interests in another statutory trust created pursuant to this Section 3 of
this Article VIII, or (iii) the Shares to be exchanged under or pursuant to
any state or federal statute to the extent permitted by law. Any such
statutory conversion, Share conversion or Share exchange shall require
approval by vote of the Board of Trustees and Shareholders as set forth in
Section 1 of this Article VIII; PROVIDED, HOWEVER, that in all respects not
governed by the DSTA, the 1940 Act, other applicable law or the requirements
of any securities exchange on which Shares are listed for trading, the Board
of Trustees shall have the power to prescribe additional procedures necessary
or appropriate to accomplish a statutory conversion, Share conversion or
Share exchange, including the power to create one or more separate statutory
trusts to which all or any part of the assets, liabilities, profits or losses
of the Trust may be transferred and to provide for the conversion of Shares
into beneficial interests in such separate statutory trust or trusts.
(c) REORGANIZATION. The Board of Trustees may cause the Trust to sell,
convey and transfer all or substantially all of the assets of the Trust to
another trust, statutory trust, partnership, limited partnership, limited
liability company, corporation or other association organized under the laws
of any state in exchange for cash, shares or other securities with such sale,
conveyance and transfer either (a) being made subject to, or with the
assumption by the transferee of, the liabilities of the Trust, or (b) not
being made subject to, or not with the assumption of, such liabilities. Such
sale, conveyance and transfer shall require approval by vote of the Board of
Trustees and Shareholders as set forth in Section 1 of this Article VIII.
Following such sale, conveyance and transfer, the Board of Trustees shall
distribute such cash, shares or other securities ratably among the
Shareholders; and if all of the assets of the Trust have been so sold,
conveyed and transferred, the Trust shall be dissolved. In all respects not
governed by the DSTA, the 1940 Act or other applicable law, the Board of
Trustees shall have the power to prescribe additional procedures necessary or
appropriate to accomplish a sale of assets including the power to create one
or more separate statutory trusts to which all or any part of the assets,
liabilities, profits or losses of the Trust may be transferred and to provide
for the conversion of Shares into beneficial interests in such separate
statutory trust or trusts.
Section 4. RECLASSIFICATION OF THE TRUST. The Board of Trustees may cause the
Trust to be converted from a "closed-end company" to an "open-end company"
(as those terms are defined, respectively, in Sections 5(a)(2) and 5(a)(1) of
the 1940 Act). Such reclassification of the Trust shall require approval by
vote of the Board of Trustees and Shareholders as set forth in Section 1 of
this Article VIII.
Section 5. PRINCIPAL HOLDER TRANSACTIONS.
-----------------------------
(a) The following transactions shall require approval by vote of the Board of
Trustees and Shareholders as set forth in Section 1 of this Article VIII:
(i) Issuance of any securities of the Trust to any Principal Holder for
cash; or
(ii) Sale, lease, or exchange to the Trust, in exchange for securities of
the Trust, of any assets of any Principal Holder (except assets having
an aggregate fair market value of less than $1,000,000, aggregating
for the purpose of such aggregate amount, all assets sold, leased or
exchanged in any series of similar transactions within a twelve-month
period).
(b) For purposes of this Section 5, the term "Principal Holder" shall mean
any Person or group (within the meaning of Rule 13d-5 under the Securities
Exchange Act of 1934, as amended (the "1934 Act")), that is the beneficial
owner, directly or indirectly, of more than ten percent (10%) of the Shares
of the Trust and shall include any affiliate or associate, as such terms are
defined in clause (2) below, of a Principal Holder, but shall not include FRI
or any affiliated person of FRI. For the purposes of this Section 5, in
addition to the Shares which a Principal Holder beneficially owns directly, a
Principal Holder shall be deemed to be the beneficial owner of any Shares (1)
which the Principal Holder has the right to acquire pursuant to any agreement
or upon exercise of conversion rights or warrants, or otherwise or (2) which
are beneficially owned, directly or indirectly (including Shares deemed owned
through application of clause (1) above), by any other Person or group with
which the Principal Holder or its "affiliate" or "associate," as those terms
are defined in Rule 12b-2 under the 1934 Act, has any agreement, arrangement,
or understanding for the purpose of acquiring, holding, voting, or disposing
of Shares, or which is its "affiliate" or "associate" as so defined. For
purposes of this Section 5, calculation of the total Shares of the Trust
shall not include Shares deemed owned through application of clause (1) above.
(c) The Board of Trustees shall have the power and duty to determine for the
purposes of this Section 5, on the basis of information known to the Trust
whether (i) a Person or group beneficially owns more than ten percent (10%)
of the Shares, (ii) a corporation, person or entity is an "affiliate" or
"associate" (as defined above) of another, and (iii) the assets being acquired
or leased by or to the Trust have an aggregate fair market value of less than
$1,000,000 (as defined above). Any such determination shall be conclusive
and binding for all purposes of this Section 5 in the absence of manifest
error.
ARTICLE IX.
AMENDMENTS
Section 1..AMENDMENTS GENERALLY. Subject to the provisions of Section 3(a) of
Article VIII and Section 2 of this Article IX, this Declaration of Trust may
be restated and/or amended at any time by the Board of Trustees, without
approval of the Shareholders. The Certificate of Trust shall be restated
and/or amended at any time by the Board of Trustees, without Shareholder
approval, to correct any inaccuracy contained therein. Any such restatement
and/or amendment of the Certificate of Trust shall be executed by at least
one (1) Trustee and shall be effective immediately upon its filing with the
office of the Secretary of State of the State of Delaware or upon such future
date as may be stated therein.
Section 2..SPECIAL AMENDMENTS. Notwithstanding any other provision of this
Declaration of Trust or the By-Laws, the amendment or repeal of Article IV,
Sections 1, 2 and 3, Article V, Article VII, Article VIII and this Article IX
of this Declaration of Trust shall require the approval of the Board of
Trustees and the affirmative vote of holders of at least two-thirds (66 2/3%)
of the Shares entitled to vote, unless such action has previously been
approved, adopted or authorized by the affirmative vote of two-thirds (66
2/3%) of the Board of Trustees, in which case the Shareholder vote set forth
in Article V, Section 2(a)(1) shall be required.
ARTICLE X.
MISCELLANEOUS
Section 1. REFERENCES; HEADINGS; COUNTERPARTS. In this Declaration of Trust
and in any such restatements and/or amendments, references to this
instrument, and all expressions of similar effect to "herein," "hereof' and
"hereunder," shall be deemed to refer to this instrument as amended or
affected by any such restatements and/or amendments. Headings are placed
herein for convenience of reference only and shall not be taken as a part
hereof or control or affect the meaning, construction or effect of this
instrument. Whenever the singular number is used herein, the same shall
include the plural; and the neuter, masculine and feminine genders shall
include each other, as applicable. Any references herein to specific
sections of the DSTA, the Code or the 1940 Act shall refer to such sections
as amended from time to time or any successor sections thereof. This
instrument may be executed in any number of counterparts, each of which shall
be deemed an original.
Section 2. APPLICABLE LAW. This Declaration of Trust is created under and is
to be governed by and construed and administered according to the laws of the
State of Delaware and the applicable provisions of the 1940 Act and the
Code. The Trust shall be a Delaware statutory trust pursuant to the DSTA,
and without limiting the provisions hereof, the Trust may exercise all powers
which are ordinarily exercised by such a statutory trust.
Section 3. PROVISIONS IN CONFLICT WITH LAW OR REGULATIONS.
(a) The provisions of this Declaration of Trust are severable, and if the
Board of Trustees shall determine, with the advice of counsel, that any of
such provisions is in conflict with the 1940 Act, the Code, the DSTA, or with
other applicable laws and regulations, the conflicting provision shall be
deemed not to have constituted a part of this Declaration of Trust from the
time when such provisions became inconsistent with such laws or regulations;
PROVIDED, HOWEVER, that such determination shall not affect any of the
remaining provisions of this Declaration of Trust or render invalid or
improper any action taken or omitted prior to such determination.
(b) If any provision of this Declaration of Trust shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any
manner affect such provision in any other jurisdiction or any other provision
of this Declaration of Trust in any jurisdiction.
Section 4. STATUTORY TRUST ONLY. It is the intention of the Trustees to
create a statutory trust pursuant to the DSTA, and thereby to create the
relationship of trustees and beneficial owner within the meaning of the DSTA
between, respectively, the Trustees and each Shareholder. It is not the
intention of the Trustees to create a general or limited partnership, limited
liability company, joint stock association, corporation, bailment, or any
form of legal relationship other than a statutory trust pursuant to the
DSTA. Nothing in this Declaration of Trust shall be construed to make the
Shareholders, either by themselves or with the Trustees, partners or members
of a joint stock association.
Section 5..USE OF THE NAMES "FRANKLIN" OR "TEMPLETON".(a)The Board of Trustees
expressly agrees and acknowledges that the names "Franklin" and "Xxxxxxxxx"
are the sole property of Franklin Resources, Inc. ("FRI"). FRI has granted to
the Trust a non-exclusive license to use such names as part of the name of
the Trust now and in the future. The Board of Trustees further expressly
agrees and acknowledges that the non-exclusive license granted herein may be
terminated by FRI if the Trust ceases to use FRI or one of its Affiliates as
Investment Adviser or to use other Affiliates or successors of FRI for such
purposes. In such event, the nonexclusive license may be revoked by FRI and
the Trust shall cease using the names "Franklin" and "Xxxxxxxxx," or any name
misleadingly implying a continuing relationship between the Trust and FRI or
any of its Affiliates, as part of its name unless otherwise consented to by
FRI or any successor to its interests in such names.
The Board of Trustees further understands and agrees that so long as FRI
and/or any future advisory Affiliate of FRI shall continue to serve as the
Trust's Investment Adviser, other registered closed- or open-end investment
companies ("funds") as may be sponsored or advised by FRI or its Affiliates
shall have the right permanently to adopt and to use the names "Franklin" and
"Xxxxxxxxx" in their names and in the names of any series or class of shares
of such funds.
[The remainder of this page has been intentionally left blank.]
IN WITNESS WHEREOF, the Trustees named below do hereby make and enter
into this Amended and Restated Agreement and Declaration of Trust as of the
date first written above.
/s/ XXXXX X. XXXXXX, III /s/ XXXXXXX X. XXXXXXX
Xxxxx X. Xxxxxx, III Xxxxxxx X. Xxxxxxx
/s/ XXXXXX X. XXXXXX /s/ XXXXXX X. XXXXXXX, XX.
Xxxxxx X. Xxxxxx Xxxxxx X. Xxxxxxx, Xx.
/s/ XXXXXX X. XXXXXXX /s/ XXXXX X.X. XXXXXX
Xxxxxx X. Xxxxxxx Xxxxx X. X. XxXxxx
/s/ XXXXXX X. XXXXXXXX /s/ XXXXXX X. XXXXXXX
Xxxxxx X. Xxxxxxxx Xxxxxx X. Xxxxxxx
/s/ S. XXXXXX XXXXXXXXX
S. Xxxxxx Xxxxxxxxx
