ALLIANCE MUNICIPAL INCOME FUND II
AGREEMENT AND DECLARATION OF TRUST
Dated: April 2, 1993
Principal Office:
c/o Alliance Capital Management
Corp.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Address of Initial Trustee and
Massachusetts Office:
Xxxxxx X. Xxxxxxx, Esq.
Xxxxxxxx & Worcester
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
ALLIANCE MUNICIPAL INCOME FUND II
AGREEMENT AND DECLARATION OF TRUST
Index
Page
RECITALS...................................................
ARTICLE 1. THE TRUST.................................... 1
Section 1.1. Name......................................... 2
Section 1.2. Location..................................... 2
Section 1.3. Nature of Trust.............................. 2
Section 1.4. Definitions.................................. 3
Section 1.5. Real Property to be Converted into
Personal Property.......................... 7
ARTICLE 2. PURPOSE OF THE TRUST......................... 8
ARTICLE 3. POWERS OF THE TRUSTEES....................... 8
Section 3.1 Powers in General............................ 8
(a) Investments............................. 9
(b) Disposition of Assets................... 10
(c) Ownership Powers........................ 10
(d) Form of Holding......................... 10
(e) Reorganization, etc..................... 10
(f) Voting Trusts, etc...................... 10
(g) Contracts, etc.......................... 11
(h) Guarantees, etc......................... 11
(i) Partnerships, etc....................... 11
(j) Insurance............................... 11
(k) Pensions, etc........................... 11
(l) Power of Collection and Litigation...... 12
(m) Issuance and Repurchase of Shares....... 12
(n) Offices................................. 12
(o) Expenses................................ 12
(p) Agents, etc............................. 12
(q) Accounts................................ 13
(r) Valuation............................... 13
(s) Indemnification......................... 13
(t) General................................. 13
i
Section 3.2. Limitations as to the Pennsylvania
Portfolio.................................. 14
Section 3.3. Borrowings; Financings;
Issuance of Securities..................... 14
Section 3.4. Deposits..................................... 14
Section 3.5. Allocations.................................. 14
Section 3.6. Further Powers; Limitations.................. 15
ARTICLE 4. TRUSTEES AND OFFICERS........................ 15
Section 4.1. Number, Designation, Election,
Term, etc.................................. 15
(a) Initial Trustee......................... 15
(b) Number.................................. 15
(c) Election and Term....................... 16
(d) Resignation and Retirement.............. 16
(e) Removal................................. 16
(f) Vacancies............................... 16
(g) Acceptance of Trusts.................... 17
(h) Effect of Death, Resignation, etc....... 17
(i) Conveyance.............................. 17
(j) No Accounting........................... 17
Section 4.2. Trustees' Meetings; Participation
by Telephone, etc.......................... 18
Section 4.3. Committees; Delegation....................... 18
Section 4.4. Officers..................................... 18
Section 4.5. Compensation of Trustees
and Officers............................... 19
Section 4.6. Ownership of Shares and Securities
of the Trust............................... 19
Section 4.7. Right of Trustees and Officers
to Own Property and to Engage
in Business; Authority of Trustees
to Permit Others to Do Likewise............ 19
Section 4.8. Reliance on Experts.......................... 20
Section 4.9. Surety Bonds................................. 20
ii
Section 4.10. Apparent Authority of
Trustees and Officers...................... 20
Section 4.11. Other Relationships Not
Prohibited................................. 20
Section 4.12. Payment of Trust Expenses.................... 21
Section 4.13. Ownership of the Trust Property.............. 21
ARTICLE 5. DELEGATION OF MANAGERIAL
RESPONSIBILITIES........................... 22
Section 5.1. Appointment; Action by
Less than All Trustees..................... 22
Section 5.2. Certain Contracts............................ 22
(a) Advisory................................ 23
(b) Administration.......................... 23
(c) Distribution............................ 23
(d) Custodian............................... 24
(e) Transfer and Dividend
Disbursing Agency....................... 24
(f) Shareholder Servicing................... 24
(g) Accounting.............................. 24
ARTICLE 6. PORTFOLIOS AND SHARES........................ 25
Section 6.1. Description of Portfolios and Shares......... 25
(a) Shares; Portfolios; Series and Classes
of Shares............................... 25
(b) Establishment, etc. of Portfolios;
Authorization of Shares................. 25
(c) Character of Separate Portfolios
and Shares Thereof...................... 26
(d) Consideration for Shares................ 26
Section 6.2. Establishment and Designation
of Certain Portfolios; General
Provisions for All Portfolios.............. 26
(a) Assets Belonging to Portfolios.......... 27
(b) Liabilities of Portfolios............... 27
(c) Dividends............................... 28
(d) Liquidation............................. 29
(e) Redemption by Shareholder............... 29
(f) Redemption at the Option of the Trust... 30
(g) Net Asset Value......................... 30
(h) Transfer................................ 31
(i) Equality................................ 31
iii
(j) Rights of Fractional Shares............. 31
(k) Conversion Rights; Conversion of Class B
Shares of the Portfolios.............. 32
(l) Suspension of Automatic Conversion
of Class B Shares..................... 34
Section 6.3. Ownership of Shares.......................... 34
Section 6.4. Investments in the Trust..................... 35
Section 6.5. No Pre-emptive Rights........................ 35
Section 6.6. Status of Shares............................. 35
ARTICLE 7. SHAREHOLDERS' VOTING
POWERS AND MEETINGS.......................... 35
Section 7.1. Voting Powers................................ 35
Section 7.2. Number of Votes and Manner
of Voting; Proxies......................... 36
Section 7.3. Meetings..................................... 37
Section 7.4. Record Dates................................. 37
Section 7.5. Quorum and Required Vote..................... 37
Section 7.6. Action by Written Consent.................... 38
Section 7.7. Inspection of Records........................ 38
Section 7.8. Additional Provisions........................ 38
ARTICLE 8. LIMITATION OF LIABILITY;
INDEMNIFICATION............................ 38
Section 8.1. Trustees, Shareholders, etc. Not
Personally Liable; Notice.................. 38
Section 8.2. Trustees' Good Faith Action;
Expert Advice; No Bond
or Surety.................................. 39
Section 8.3. Indemnification of
Shareholders............................... 40
Section 8.4. Indemnification of Trustees,
Officers, etc.............................. 40
Section 8.5. Compromise Payment........................... 41
iv
Section 8.6. Indemnification Not
Exclusive, etc............................. 41
Section 8.7. Liability of Third Persons
Dealing with Trustees...................... 42
ARTICLE 9. DURATION; REORGANIZATION;
AMENDMENTS................................. 42
Section 9.1. Duration and Termination
of Trust................................... 42
Section 9.2. Reorganization............................... 42
Section 9.3. Amendments; etc.............................. 43
Section 9.4. Filing of Copies of
Declaration and Amendments................. 44
ARTICLE 10. MISCELLANEOUS................................ 44
Section 10.1. Governing Law................................ 44
Section 10.2. Counterparts................................. 44
Section 10.3. Reliance by Third Parties.................... 44
Section 10.4. References; Headings......................... 45
Section 10.5. Use of the Name "Alliance"................... 45
SIGNATURES................................................. 45
ACKNOWLEDGMENTS............................................ 47
v
AGREEMENT AND DECLARATION OF TRUST
OF
ALLIANCE MUNICIPAL INCOME FUND II
This AGREEMENT AND DECLARATION OF TRUST, made at Boston,
Massachusetts this 2nd day of April, 1993 by and between the
Settlor and the Trustee whose signature is set forth below (the
"Initial Trustee"),
W I T N E S S E T H T H A T:
WHEREAS, Xxxxx X. Xxxxx, an individual residing in South
Natick, Massachusetts (the "Settlor"), proposes to deliver to the
Initial Trustee the sum of one hundred dollars ($100.00) lawful
money of the United States of America in trust hereunder and to
authorize the Initial Trustee and all other Persons acting as
Trustees hereunder to employ such funds, and any other funds
coming into their hands or the hands of their successor or
successors as such Trustees, to carry on the business of an
investment company, and as such of buying, selling, investing in
or otherwise dealing in and with stocks, bonds, debentures,
warrants, options, futures contracts and other securities and
interests therein, or calls or puts with respect to any of the
same, or such other and further investment media and other
property as the Trustees may deem advisable, which are not
prohibited by law or the terms of this Declaration; and
WHEREAS, the Initial Trustee is willing to accept such
sum, together with any and all additions thereto and the income or
increments thereof, upon the terms, conditions and trusts
hereinafter set forth; and
WHEREAS, it is proposed that the assets held by the
Trustees be divided into separate portfolios, each with its own
separate investment assets, investment objectives, policies and
purposes, and that the beneficial interest in each such fund shall
be divided into transferable Shares of Beneficial Interest, a
separate Series of Shares for each fund, all in accordance with
the provisions hereinafter set forth; and
WHEREAS, it is desired that the trust established hereby
(the "Trust") be managed and operated as a trust with transferable
shares under the laws of Massachusetts, of the type commonly known
as and referred to as a Massachusetts business trust, in
accordance with the provisions hereinafter set forth,
NOW, THEREFORE, the Initial Trustee, for himself and his
successors as Trustees, hereby declares, and agrees with the
Settlor, for himself and for all Persons who shall hereafter
become holders of Shares of Beneficial Interest of the Trust, of
any Series, that the Trustees will hold the sum delivered to them
upon the execution hereof, and all other and further cash,
securities and other property of every type and description which
they may in any way acquire in their capacity as such Trustees,
together with the income therefrom and the proceeds thereof, IN
TRUST NEVERTHELESS, to manage and dispose of the same for the
benefit of the holders from time to time of the Shares of
Beneficial Interest of the several Series being issued and to be
issued hereunder and in the manner and subject to the provisions
hereof, to wit:
ARTICLE 1
THE TRUST
SECTION 1.1. Name. The name of the Trust shall be
"ALLIANCE MUNICIPAL INCOME FUND II",
and so far as may be practicable the Trustees shall conduct the
Trust's activities, execute all documents and xxx or be sued under
that name, which name (and the word "Trust" wherever used in this
Agreement and Declaration of Trust, except where the context
otherwise requires) shall refer to the Trustees in their capacity
as Trustees, and not individually or personally, and shall not
refer to the officers, agents or employees of the Trust or of such
Trustees, or to the holders of the Shares of Beneficial Interest
of the Trust, of any Series or Class. If the Trustees determine
that the use of such name is not practicable, legal or convenient
at any time or in any jurisdiction, or if the Trust is required to
discontinue the use of such name pursuant to Section 10.5 hereof,
then subject to that Section, the Trustees may use such other
designation, or they may adopt such other name for the Trust as
they deem proper, and the Trust may hold property and conduct its
activities under such designation or name.
SECTION 1.2. Location. The Trust shall have an office
in Boston, Massachusetts, unless changed by the Trustees to
another location in Massachusetts or elsewhere, but such office
need not be the sole or principal office of the Trust. The Trust
may have such other offices or places of business as the Trustees
may from time to time determine to be necessary or expedient.
SECTION 1.3. Nature of Trust. The Trust shall be a
trust with transferable shares under the laws of The Commonwealth
of Massachusetts, of the type referred to in Section 1 of Chapter
182 of the Massachusetts General Laws and commonly termed a
Massachusetts business trust. The Trust is not intended to be,
shall not be deemed to be, and shall not be treated as, a general
partnership, limited partnership, joint venture, corporation or
2
joint stock company. The Shareholders shall be beneficiaries and
their relationship to the Trustees shall be solely in that
capacity in accordance with the rights conferred upon them
hereunder.
SECTION 1.4. Definitions. As used in this Agreement
and Declaration of Trust, the following terms shall have the
meanings set forth below unless the context thereof otherwise
requires:
"Accounting Agent" shall have the meaning designated in
Section 5.2(g) hereof.
"Administrator" shall have the meaning designated in
Section 5.2(b) hereof.
"Affiliated Person" shall have the meaning assigned to it
in the 1940 Act.
"By-Laws" shall mean the By-Laws of the Trust, as amended
from time to time.
"Certificate of Designation" shall have the meaning
designated in Section 6.1 hereof.
"Certificate of Termination" shall have the meaning
designated in Section 6.1 hereof.
"Class" or "Classes" shall mean, with respect to any
Series, any Shares of such Series in respect of which the Trustees
shall from time to time fix and determine any special provisions
relating to sales charges, any rights of redemption and the price,
terms and manner of redemption, special and relative rights as to
dividends and other distributions and on liquidation, sinking or
purchase fund provisions, conversion rights, and conditions under
which the Shareholders of such Class shall have separate voting
rights or no voting rights.
"Class A Shares" shall mean, with respect to Shares of
any Portfolio established and designated by the Declaration, that
class of such Shares which are subject to a sales charge or "load"
upon the purchase thereof but the proceeds of the redemption of
which are not subject to a contingent deferred sales charge
payable on such redemption.
"Class B Shares" shall mean, with respect to Shares of
any Portfolio established and designated by the Declaration, that
class the Shares of which are not subject to a sales charge or
"load" upon the purchase thereof but the proceeds of the
redemption of which may be reduced, to the extent determined by
the Trustees, by the amount of a contingent deferred sales charge
3
payable on such redemption pursuant to subsection (e) of
Section 6.2 hereof.
"Class C Shares" shall mean, with respect to Shares of
any Portfolio established and designated by the Declaration, that
class the Shares of which are not subject to a sales charge or
"load" upon the purchase thereof.
"Commission" shall have the same meaning as in the 1940
Act.
"Contracting Party" shall have the meaning designated in
the preamble to Section 5.2 hereof.
"Conversion Date" shall have the meaning designated in
Section 6.2(k)(ii) hereof.
"Covered Person" shall have the meaning designated in
Section 8.4 hereof.
"Custodian" shall have the meaning designated in
Section 5.2(d) hereof.
"Declaration" and "Declaration of Trust" shall mean this
Agreement and Declaration of Trust and all amendments or
modifications thereof as from time to time in effect. References
in this Agreement and Declaration of Trust to "hereof", "herein"
and "hereunder" shall be deemed to refer to the Declaration of
Trust generally, and shall not be limited to the particular text,
Article or Section in which such words appear.
"Disabling Conduct" shall have the meaning designated in
Section 8.4 hereof.
"Distributor" shall have the meaning designated in
Section 5.2(c) hereof.
"Dividend Disbursing Agent" shall have the meaning
designated in Section 5.2(e) hereof.
"Eligible Investment Company" shall have the meaning
designated in paragraph (i) of Section 6.2(k) hereof.
"General Items" shall have the meaning defined in
Section 6.2(a) hereof.
"Initial Portfolio", and "Initial Portfolios" shall have
the meaning designated in the preamble to Section 6.2 hereof.
"Initial Trustee" shall have the meaning defined in the
preamble hereto.
4
"Internal Revenue Code" shall mean the Internal Revenue
Code of 1986, as from time to time amended and in effect, or any
substituted statute dealing with the same general subject matter
as the Internal Revenue Code of 1986, as in effect on April 1,
1993, and in either case the rules and regulations thereunder, as
from time to time interpreted and applied by applicable case law
thereunder.
"Investment Adviser" shall have the meaning stated in
Section 5.2(a) hereof.
"Majority of the Trustees" shall mean a majority of the
Trustees in office at the time in question. At any time at which
there shall be only one (1) Trustee in office, such term shall
mean such Trustee.
"Majority Shareholder Vote," as used with respect to the
election of any Trustee at a meeting of Shareholders, shall mean
the vote for the election of such Trustee of a plurality of all
outstanding Shares of the Trust, without regard to Series or
Class, represented in person or by proxy at such meeting and
entitled to vote thereon, provided that a quorum (determined as
provided in Section 7.5 hereof) is present, and as used with
respect to any other action required or permitted to be taken by
Shareholders, shall mean the affirmative vote for such action of
the holders of that number of all outstanding Shares (or, where a
separate vote of Shares of any particular Series or Class is to be
taken, the affirmative vote of that number of the outstanding
Shares of that Series or Class) of the Trust which constitutes:
(i) a majority of all Shares (or of Shares of the particular
Series or Class) represented in person or by proxy and entitled to
vote on such action at the meeting of Shareholders at which such
action is to be taken, provided that a quorum (as determined as
provided in Section 7.5 hereof) is present; or (ii) if such vote
is to be given or such action is to be taken by written consent of
Shareholders, a majority of all Shares (or of Shares of the
particular Series or Class) issued and outstanding and entitled to
vote on such action; provided, that (iii) as used with respect to
any action requiring the affirmative vote of "a majority of the
outstanding voting securities", as the quoted phrase is defined in
the 1940 Act, of the Trust or of any Portfolio, "Majority
Shareholder Vote" means the vote for such action at a meeting of
Shareholders of the smallest majority of all outstanding Shares of
the Trust (or of Shares of the particular Series or Class)
entitled to vote on such action which satisfies such 1940 Act
voting requirement.
"1940 Act" shall mean the provisions of the Investment
Company Act of 1940 and the rules and regulations thereunder, both
as amended from time to time, and any order or orders thereunder
which may from time to time be applicable to the Trust.
5
"Person" shall mean and include individuals, as well as
corporations, limited partnerships, general partnerships, joint
stock companies, joint ventures, associations, banks, trust
companies, land trusts, business trusts or other organizations
established under the laws of any jurisdiction, whether or not
considered to be legal entities, and governments and agencies and
political subdivisions thereof.
"Portfolio" or "Portfolios" shall mean one or more of the
separate components of the assets of the Trust which are now or
hereafter established and designated under or in accordance with
the provisions of Article 6 hereof.
"Portfolio Assets" shall have the meaning defined in
Section 6.2(a) hereof.
"Principal Underwriter" shall have the meaning designated
in Section 5.2(c) hereof.
"Prospectus," as used with respect to any Portfolio or
Series of Shares, shall mean the prospectus relating to such
Portfolio or Series which constitutes part of the currently
effective Registration Statement of the Trust under the Securities
Act of 1933, as such prospectus may be amended or supplemented
from time to time.
"Securities" shall mean any and all bills, notes, bonds,
debentures or other obligations or evidences of indebtedness,
certificates of deposit, bankers' acceptances, commercial paper,
repurchase agreements or other money market instruments; stocks,
shares or other equity ownership interests; and warrants, options
or other instruments representing rights to subscribe for,
purchase, receive or otherwise acquire or to sell, transfer,
assign or otherwise dispose of, and scrip, certificates, receipts
or other instruments evidencing any ownership rights or interests
in, any of the foregoing and "when issued" and "delayed delivery"
contracts for securities, issued, guaranteed or sponsored by any
governments, political subdivisions or governmental authorities,
agencies or instrumentalities, by any individuals, firms,
companies, corporations, syndicates, associations or trusts, or by
any other organizations or entities whatsoever, irrespective of
their forms or the names by which they may be described, whether
or not they be organized and operated for profit, and whether they
be domestic or foreign with respect to The Commonwealth of
Massachusetts or the United States of America.
"Securities of the Trust" shall mean any Securities
issued by the Trust.
6
"Series" shall mean one or more of the series of Shares
authorized by the Trustees, each to represent the beneficial
interest in one of the Portfolios of the Trust.
"Settlor" shall have the meaning stated in the first
"Whereas" clause set forth above.
"Shareholder" shall mean as of any particular time any
Person shown of record at such time on the books of the Trust as a
holder of outstanding Shares of any Series or Class, and shall
include a pledgee into whose name any such Shares are transferred
in pledge.
"Shareholder Servicing Agent" shall have the meaning
designated in Section 5.2(f) hereof.
"Shares" shall mean the transferable units into which the
beneficial interest in the Trust and each Portfolio of the Trust
(as the context may require) shall be divided from time to time,
and includes fractions of Shares as well as whole Shares. All
references herein to "Shares" which are not accompanied by a
reference to any particular Series or Class shall be deemed to
apply to outstanding Shares without regard to Series or Class.
"Single Class Voting," as used with respect to any matter
to be acted upon at a meeting or by written consent of
Shareholders, shall mean a style of voting in which each holder of
one or more Shares shall be entitled to one vote on the matter in
question for each Share standing in his name on the records of the
Trust, irrespective of Series or Class, and all outstanding Shares
of all Series or Class vote as a single class.
"Statement of Additional Information," as used with
respect to any Series or Class of Shares, shall mean the statement
of additional information relating to such Series or Class, which
constitutes part of the currently effective Registration Statement
of the Trust under the Securities Act of 1933, as such statement
of additional information may be amended or supplemented from time
to time.
"Transfer Agent" shall have the meaning defined in
Section 5.2(e) hereof.
"Trust" shall have the meaning stated in the fourth
"Whereas" clause set forth above.
"Trust Property" shall mean, as of any particular time,
any and all property which shall have been transferred, conveyed
or paid to the Trust or the Trustees, and all interest, dividends,
income, earnings, profits and gains therefrom, and proceeds
thereof, including any proceeds derived from the sale, exchange or
7
liquidation thereof, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be,
and which at such time is owned or held by, or for the account of,
the Trust or the Trustees, without regard to the Portfolio to
which such property is allocated.
"Trustees" shall mean, collectively, the Initial Trustee,
so long as he shall continue in office, and all other individuals
who at the time in question have been duly elected or appointed as
Trustees of the Trust in accordance with the provisions hereof and
who have qualified and are then in office. At any time at which
there shall be only one (1) Trustee in office, such term shall
mean such single Trustee.
SECTION 1.5. Real Property to be Converted into
Personal Property. Notwithstanding any other provision hereof,
any real property at any time forming part of the Trust Property
shall be held in trust for sale and conversion into personal
property at such time or times and in such manner and upon such
terms as the Trustees shall approve, but the Trustees shall have
power until the termination of this Trust to postpone such
conversion as long as they in their uncontrolled discretion shall
think fit, and for the purpose of determining the nature of the
interest of the Shareholders therein, all such real property shall
at all times be considered as personal property.
ARTICLE 2
PURPOSE OF THE TRUST
The purpose of the Trust shall be to engage in the
business of being an investment company, and as such of
subscribing for, purchasing or otherwise acquiring, holding for
investment or trading in, borrowing, lending and selling short,
selling, assigning, negotiating or exchanging and otherwise
disposing of, and turning to account, realizing upon and generally
dealing in and with, in any manner, (a) Securities of all kinds,
(b) precious metals and other minerals, contracts to purchase and
sell, and other interests of every nature and kind in, such metals
or minerals, and (c) rare coins and other numismatic items, and
all as the Trustees in their discretion shall determine to be
necessary, desirable or appropriate, and to exercise and perform
any and every act, thing or power necessary, suitable or desirable
for the accomplishment of such purpose, the attainment of any of
the objectives or the furtherance of any of the powers given
hereby which are lawful purposes, objects or powers of a trust
with transferable shares of the type commonly termed a
Massachusetts business trust; and to do every other act or acts or
thing or things incidental or appurtenant to or growing out of or
in connection with the aforesaid objectives, purposes or powers,
or any of them, which a trust of the type commonly termed a
8
Massachusetts business trust is not now or hereafter prohibited
from doing, exercising or performing.
ARTICLE 3
POWERS OF THE TRUSTEES
SECTION 3.1. Powers in General. The Trustees shall
have, without other or further authorization, full, entire,
exclusive and absolute power, control and authority over, and
management of, the business of the Trust and over the Trust
Property, to the same extent as if the Trustees were the sole
owners of the business and property of the Trust in their own
right, and with such powers of delegation as may be permitted by
this Declaration, subject only to such limitations as may be
expressly imposed by this Declaration of Trust or by applicable
law. The enumeration of any specific power or authority herein
shall not be construed as limiting the aforesaid power or
authority or any specific power or authority. Without limiting
the foregoing, the Trustees may adopt By-Laws not inconsistent
with this Declaration of Trust providing for the conduct of the
business and affairs of the Trust and may amend and repeal them to
the extent that such By-Laws do not reserve that right to the
Shareholders; they may select, and from time to time change, the
fiscal year of the Trust; they may adopt and use a seal for the
Trust, provided, that unless otherwise required by the Trustees,
it shall not be necessary to place the seal upon, and its absence
shall not impair the validity of, any document, instrument or
other paper executed and delivered by or on behalf of the Trust;
they may from time to time in accordance with the provisions of
Section 6.1 hereof establish one or more Portfolios to which they
may allocate such of the Trust Property, subject to such
liabilities, as they shall deem appropriate, each such Portfolio
to be operated by the Trustees as a separate and distinct
investment medium and with separately defined investment
objectives and policies and distinct investment purposes, all as
established by the Trustees, or from time to time changed by them;
they may as they consider appropriate elect and remove officers
and appoint and terminate agents and consultants and hire and
terminate employees, any one or more of the foregoing of whom may
be a Trustee; they may appoint from their own number, and
terminate, any one or more committees consisting of one or more
Trustees, including without implied limitation an Executive
Committee, which may, when the Trustees are not in session and
subject to the 1940 Act, exercise some or all of the power and
authority of the Trustees as the Trustees may determine; in
accordance with Section 5.2 they may employ one or more Investment
Advisers, Administrators and Custodians and may authorize any
Custodian to employ subcustodians or agents and to deposit all or
any part of such assets in a system or systems for the central
handling of Securities, retain Transfer, Dividend Disbursing,
9
Accounting or Shareholder Servicing Agents or any of the
foregoing, provide for the distribution of Shares by the Trust
through one or more Distributors, Principal Underwriters or
otherwise, set record dates or times for the determination of
Shareholders entitled to participate in, benefit from or act with
respect to various matters; and in general they may delegate to
any officer of the Trust, to any Committee of the Trustees and to
any employee, Investment Adviser, Administrator, Distributor,
Custodian, Transfer Agent, Dividend Disbursing Agent, or any other
agent or consultant of the Trust, such authority, powers,
functions and duties as they consider desirable or appropriate for
the conduct of the business and affairs of the Trust, including
without implied limitation the power and authority to act in the
name of the Trust and of the Trustees, to sign documents and to
act as attorney-in-fact for the Trustees. Without limiting the
foregoing and to the extent not inconsistent with the 1940 Act or
other applicable law, the Trustees shall have power and authority:
(a) Investments. Subject to the limitations of
Section 3.2 with respect to the Pennsylvania Portfolio
referred to in the preamble to Section 6.2 hereof, to
invest and reinvest cash and other property; to buy, for
cash or on margin, and otherwise acquire and hold,
Securities created or issued by any Persons, including
Securities maturing after the possible termination of the
Trust; to make payment therefor in any lawful manner in
exchange for any of the Trust Property; and to hold cash
or other property uninvested without in any event being
bound or limited by any present or future law or custom
in regard to investments by trustees;
(b) Disposition of Assets. Subject to the
limitations of Section 3.2 with respect to the
Pennsylvania Portfolio, to lend, sell, exchange,
mortgage, pledge, hypothecate, grant security interests
in, encumber, negotiate, convey, transfer or otherwise
dispose of, and to trade in, any and all of the Trust
Property, free and clear of all trusts, for cash or on
terms, with or without advertisement, and on such terms
as to payment, security or otherwise, all as they shall
deem necessary or expedient;
(c) Ownership Powers. To vote or give assent, or
exercise any and all other rights, powers and privileges
of ownership with respect to, and to perform any and all
duties and obligations as owners of, any Securities or
other property forming part of the Trust Property, the
same as any individual might do; to exercise powers and
rights of subscription or otherwise which in any manner
arise out of ownership of Securities, and to receive
powers of attorney from, and to execute and deliver
10
proxies or powers of attorney to, such Person or Persons
as the Trustees shall deem proper, receiving from or
granting to such Person or Persons such power and
discretion with relation to Securities or other property
of the Trust, all as the Trustees shall deem proper;
(d) Form of Holding. To hold any Security or other
property in a form not indicating any trust, whether in
bearer, unregistered or other negotiable form, or in the
name of the Trustees or of the Trust, or of the Portfolio
to which such Securities or property belong, or in the
name of a Custodian, subcustodian or other nominee or
nominees, or otherwise, upon such terms, in such manner
or with such powers, as the Trustees may determine, and
with or without indicating any trust or the interest of
the Trustees therein;
(e) Reorganization, etc. To consent to or
participate in any plan for the reorganization,
consolidation or merger of any corporation or issuer, any
Security of which is or was held in the Trust or any
Portfolio; to consent to any contract, lease, mortgage,
purchase or sale of property by such corporation or
issuer, and to pay calls or subscriptions with respect to
any Security forming part of the Trust Property;
(f) Voting Trusts, etc. To join with other holders
of any Securities in acting through a committee,
depository, voting trustee or otherwise, and in that
connection to deposit any Security with, or transfer any
Security to, any such committee, depository 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, depository or trustee
as the Trustees shall deem proper;
(g) Contracts, etc. To enter into, make and
perform all such obligations, contracts, agreements and
undertakings of every kind and description, with any
Person or Persons, as the Trustees shall in their
discretion deem expedient in the conduct of the business
of the Trust, for such terms as they shall see fit,
whether or not extending beyond the term of office of the
Trustees, or beyond the possible expiration of the Trust;
to amend, extend, release or cancel any such obligations,
contracts, agreements or understandings; and to execute,
acknowledge, deliver and record all written instruments
which they may deem necessary or expedient in the
exercise of their powers;
11
(h) Guarantees, etc. To endorse or guarantee the
payment of any notes or other obligations of any Person;
to make contracts of guaranty or suretyship, or otherwise
assume liability for payment thereof; and to mortgage and
pledge the Trust Property or any part thereof to secure
any of or all such obligations;
(i) Partnerships, etc. To enter into joint
ventures, general or limited partnerships and any other
combinations or associations;
(j) Insurance. To purchase and pay for entirely
out of Trust Property such insurance as they may deem
necessary or appropriate for the conduct of the business,
including, without limitation, insurance policies
insuring the assets of the Trust and payment of
distributions and principal on its portfolio investments,
and insurance policies insuring the Shareholders,
Trustees, officers, employees, agents, consultants,
Investment Advisers, managers, Administrators,
Distributors, Principal Underwriters, or other
independent contractors, or any thereof (or any Person
connected therewith), of the Trust, individually, against
all claims and liabilities of every nature arising by
reason of holding, being or having held any such office
or position, or by reason of any action alleged to have
been taken or omitted by any such Person in any such
capacity, including any action taken or omitted that may
be determined to constitute negligence, whether or not
the Trust would have the power to indemnify such Person
against such liability;
(k) Pensions, etc. To pay pensions for faithful
service, as deemed appropriate by the Trustees, and to
adopt, establish and carry out pension, profit-sharing,
share bonus, share purchase, savings, thrift and other
retirement, incentive and benefit plans, trusts and
provisions, including the purchasing of life insurance
and annuity contracts as a means of providing such
retirement and other benefits, for any or all of the
Trustees, officers, employees and agents of the Trust;
(l) Power of Collection and Litigation. To
collect, xxx for and receive all sums of money coming due
to the Trust, to employ counsel, and to commence, engage
in, prosecute, intervene in, join, defend, compound,
compromise, adjust or abandon, in the name of the Trust,
any and all actions, suits, proceedings, disputes,
claims, controversies, demands or other litigation or
legal proceedings relating to the Trust, the business of
the Trust, the Trust Property, or the Trustees, officers,
12
employees, agents and other independent contractors of
the Trust, in their capacity as such, at law or in
equity, or before any other bodies or tribunals, and to
compromise, arbitrate or otherwise adjust any dispute to
which the Trust may be a party, whether or not any suit
is commenced or any claim shall have been made or
asserted;
(m) Issuance and Repurchase of Shares. To issue,
sell, repurchase, redeem, retire, cancel, acquire, hold,
resell, reissue, dispose of, transfer, and otherwise deal
in Shares of any Series, and, subject to Article 6
hereof, to apply to any such repurchase, redemption,
retirement, cancellation or acquisition of Shares of any
Series, any of the Portfolio Assets belonging to the
Portfolio to which such Series relates, whether
constituting capital or surplus or otherwise, to the full
extent now or hereafter permitted by applicable law;
provided, that any Shares belonging to the Trust shall
not be voted, directly or indirectly;
(n) Offices. To have one or more offices, and to
carry on all or any of the operations and business of the
Trust, in any of the States, Districts or Territories of
the United States, and in any and all foreign countries,
subject to the laws of such State, District, Territory or
country;
(o) Expenses. To incur and pay any and all such
expenses and charges as they may deem advisable
(including without limitation appropriate fees to
themselves as Trustees), and to pay all such sums of
money for which they may be held liable by way of
damages, penalty, fine or otherwise;
(p) Agents, etc. To retain and employ any and all
such servants, agents, employees, attorneys, brokers,
investment advisers, accountants, architects, engineers,
builders, escrow agents, depositories, consultants,
ancillary trustees, custodians, agents for collection,
insurers, banks and officers, as they think best for the
business of the Trust or any Portfolio, to supervise and
direct the acts of any of the same, and to fix and pay
their compensation and define their duties;
(q) Accounts. To determine, and from time to time
change, the method or form in which the accounts of the
Trust shall be kept;
(r) Valuation. Subject to the requirements of the
1940 Act, to determine from time to time the value of all
13
or any part of the Trust Property and of any services,
Securities, property or other consideration to be
furnished to or acquired by the Trust, and from time to
time to revalue all or any part of the Trust Property in
accordance with such appraisals or other information as
is, in the Trustees' sole judgment, necessary and
satisfactory;
(s) Indemnification. In addition to the mandatory
indemnification provided for in Article 8 hereof and to
the extent permitted by law, to indemnify or enter into
agreements with respect to indemnification with any
Person with whom this Trust has dealings, including,
without limitation, any independent contractor, to such
extent as the Trustees shall determine; and
(t) General. To do all such other acts and things
and to conduct, operate, carry on and engage in such
other lawful businesses or business activities as they
shall in their sole and absolute discretion consider to
be incidental to the business of the Trust or any
Portfolio as an investment company, and to exercise all
powers which they shall in their discretion consider
necessary, useful or appropriate to carry on the business
of the Trust or any Portfolio, to promote any of the
purposes for which the Trust is formed, whether or not
such things are specifically mentioned herein, in order
to protect or promote the interests of the Trust or any
Portfolio, or otherwise to carry out the provisions of
this Declaration.
SECTION 3.2. Limitations as to the Pennsylvania
Portfolio. Notwithstanding the provisions of paragraphs (a) and
(b) of Section 3.1, the Trustees shall have no power to vary the
investments of the Pennsylvania Portfolio except to:
(i) eliminate unsafe investments and investments not
consistent with the preservation of the capital or
the tax status of the investments of the
Pennsylvania Portfolio;
(ii) honor redemption orders, meet anticipated redemption
requirements, and negate gains from discount
purchases;
(iii) maintain a constant net asset value per share
pursuant to, and in compliance with, an order or
rule of the United States Securities and Exchange
Commission;
14
(iv) reinvest the earnings from securities in like
securities; or
(v) defray normal administrative expenses.
The restrictions of the foregoing clauses (i) through (v) shall be
applicable to the investments of the Pennsylvania Portfolio, and
to the dispositions thereof, in addition to all other provisions
of this Declaration, which shall be fully applicable to the
Pennsylvania Portfolio:
SECTION 3.3. Borrowings; Financings; Issuance of
Securities. The Trustees shall have power to borrow or in any
other manner raise such sum or sums of money, and to incur such
other indebtedness for goods or services, or for or in connection
with the purchase or other acquisition of property, as they shall
deem advisable for the purposes of the Trust, in any manner and on
any terms, and to evidence the same by negotiable or non-
negotiable Securities which may mature at any time or times, even
beyond the possible date of termination of the Trust; to issue
Securities of any type for such cash, property, services or other
considerations, and at such time or times and upon such terms, as
they may deem advisable; and to reacquire any such Securities.
Any such Securities of the Trust may, at the discretion of the
Trustees, be made convertible into Shares of any Series, or may
evidence the right to purchase, subscribe for or otherwise acquire
Shares of any Series, at such times and on such terms as the
Trustees may prescribe.
SECTION 3.4. Deposits. Subject to the requirements of
the 1940 Act, the Trustees shall have power to deposit any moneys
or Securities included in the Trust Property with any one or more
banks, trust companies or other banking institutions, whether or
not such deposits will draw interest. Such deposits are to be
subject to withdrawal in such manner as the Trustees may
determine, and the Trustees shall have no responsibility for any
loss which may occur by reason of the failure of the bank, trust
company or other banking institution with which any such moneys or
Securities have been deposited, other than liability based on
their gross negligence or willful fault.
SECTION 3.5. Allocations. The Trustees shall have
power to determine whether moneys or other assets received by the
Trust shall be charged or credited to income or capital, or
allocated between income and capital, including the power to
amortize or fail to amortize any part or all of any premium or
discount, to treat any part or all of the profit resulting from
the maturity or sale of any asset, whether purchased at a premium
or at a discount, as income or capital, or to apportion the same
between income and capital, to apportion the sale price of any
asset between income and capital, and to determine in what manner
15
any expenses or disbursements are to be borne as between income
and capital, whether or not in the absence of the power and
authority conferred by this Section 3.5 such assets would be
regarded as income or as capital or such expense or disbursement
would be charged to income or to capital; to treat any dividend or
other distribution on any investment as income or capital, or to
apportion the same between income and capital; to provide or fail
to provide reserves, including reserves for depreciation,
amortization or obsolescence in respect of any Trust Property in
such amounts and by such methods as they shall determine; to
allocate less than all of the consideration paid for Shares of any
Series to the shares of beneficial interest account of the
Portfolio to which such Shares relate and to allocate the balance
thereof to paid-in capital of that Portfolio, and to reallocate
such amounts from time to time; all as the Trustees may reasonably
deem proper.
SECTION 3.6. Further Powers; Limitations. The Trustees
shall have power to do all such other matters and things, and to
execute all such instruments, as they deem necessary, proper or
desirable in order to carry out, promote or advance the interests
of the Trust, although such matters or things are not herein
specifically mentioned. Any determination as to what is in the
interests of the Trust made by the Trustees in good faith shall be
conclusive. In construing the provisions of this Declaration of
Trust, the presumption shall be in favor of a grant of power to
the Trustees. The Trustees shall not be required to obtain any
court order to deal with the Trust Property. The Trustees may
limit their right to exercise any of their powers through express
restrictive provisions in the instruments evidencing or providing
the terms for any Securities of the Trust or in other contractual
instruments adopted on behalf of the Trust.
ARTICLE 4
TRUSTEES AND OFFICERS
SECTION 4.1. Number, Designation, Election, Term, etc.
(a) Initial Trustee. Upon his execution of this
Declaration of Trust or a counterpart hereof or some
other writing in which he accepts such Trusteeship and
agrees to the provisions hereof, the individual whose
signature is affixed hereto as Initial Trustee shall
become the Initial Trustee hereof.
(b) Number. The Trustees serving as such, whether
named above or hereafter becoming Trustees, may increase
(to not more than twenty (20)) or decrease the number of
Trustees to a number other than the number theretofore
determined by a written instrument signed by a Majority
16
of the Trustees (or by an officer of the Trust pursuant
to the vote of a Majority of the Trustees). No decrease
in the number of Trustees shall have the effect of
removing any Trustee from office prior to the expiration
of his term, but the number of Trustees may be decreased
in conjunction with the removal of a Trustee pursuant to
subsection (e) of this Section 4.1.
(c) Election and Term. The Trustees shall be
elected by the Shareholders of the Trust at the first
meeting of Shareholders immediately prior to the initial
public offering of Shares of the Trust, and the term of
office of any Trustees in office before such election
shall terminate at the time of such election. Subject to
Section 16(a) of the 1940 Act and to the preceding
sentence of this subsection (c), the Trustees shall have
the power to set and alter the terms of office of the
Trustees, and at any time to lengthen or shorten their
own terms or make their terms of unlimited duration, to
elect their own successors and, pursuant to subsection
(f) of this Section 4.1, to appoint Trustees to fill
vacancies; provided, that Trustees shall be elected by a
Majority Shareholder Vote at any such time or times as
the Trustees shall determine that such action is required
under Section 16(a) of the 1940 Act or, if not so
required, that such action is advisable; and further
provided, that, after the initial election of Trustees by
the Shareholders, the term of office of any incumbent
Trustee shall continue until the termination of this
Trust or his earlier death, resignation, retirement,
bankruptcy, adjudicated incompetency or other incapacity
or removal, or if not so terminated, until the election
of such Trustee's successor in office has become
effective in accordance with this subsection (c).
(d) Resignation and Retirement. Any Trustee may
resign his trust or retire as a Trustee, by a written
instrument signed by him and delivered to the other
Trustees or to any officer of the Trust, and such
resignation or retirement shall take effect upon such
delivery or upon such later date as is specified in such
instrument.
(e) Removal. Any Trustee may be removed with or
without cause at any time: (i) by written instrument,
signed by at least two-thirds (2/3) of the number of
Trustees prior to such removal, specifying the date upon
which such removal shall become effective; or (ii) by
vote of Shareholders holding not less than two-thirds
(2/3) of the Shares of each Series then outstanding, cast
in person or by proxy at any meeting called for the
17
purpose; or (iii) by a written declaration signed by
Shareholders holding at least two-thirds (2/3) of the
Shares of each Series then outstanding and filed with the
Trust's Custodian.
(f) Vacancies. Any vacancy or anticipated vacancy
resulting from any reason, including an increase in the
number of Trustees, may (but need not unless required by
the 0000 Xxx) be filled by a Majority of the Trustees,
subject to the provisions of Section 16(a) of the 1940
Act, through the appointment in writing of such other
individual as such remaining Trustees in their discretion
shall determine; provided, that if there shall be no
Trustees in office, such vacancy or vacancies shall be
filled by vote of the Shareholders. Any such appointment
or election shall be effective upon such individual's
written acceptance of his appointment as a Trustee and
his agreement to be bound by the provisions of this
Declaration of Trust, except that any such appointment in
anticipation of a vacancy to occur by reason of
retirement, resignation or increase in the number of
Trustees to be effective at a later date shall become
effective only at or after the effective date of said
retirement, resignation or increase in the number of
Trustees.
(g) Acceptance of Trusts. Any individual appointed
as a Trustee under subsection (f), and any individual
elected as a Trustee under subsection (c), of this
Section 4.1 who was not, immediately prior to such
election, acting as a Trustee, shall accept such
appointment or election in writing and agree in such
writing to be bound by the provisions hereof, and
whenever such individual shall have executed such writing
and any conditions to such appointment or election shall
have been satisfied, such individual shall become a
Trustee and the Trust Property shall vest in the new
Trustee, together with the continuing Trustees, without
any further act or conveyance.
(h) Effect of Death, Resignation, etc. No vacancy,
whether resulting from the death, resignation,
retirement, removal or incapacity of any Trustee, an
increase in the number of Trustees or otherwise, shall
operate to annul or terminate the Trust hereunder or to
revoke or terminate any existing agency or contract
created or entered into pursuant to the terms of this
Declaration of Trust. Until such vacancy is filled as
provided in this Section 4.1, the Trustees in office (if
any), regardless of their number, shall have all the
powers granted to the Trustees and shall discharge all
18
the duties imposed upon the Trustees by this Declaration.
A written instrument certifying the existence of such
vacancy signed by a Majority of the Trustees shall be
conclusive evidence of the existence of such vacancy.
(i) Conveyance. In the event of the resignation or
removal of a Trustee or his otherwise ceasing to be a
Trustee, such former Trustee or his legal representative
shall, upon request of the continuing Trustees, execute
and deliver such documents as may be required for the
purpose of consummating or evidencing the conveyance to
the Trust or the remaining Trustees of any Trust Property
held in such former Trustee's name, but the execution and
delivery of such documents shall not be requisite to the
vesting of title to the Trust Property in the remaining
Trustees, as provided in subsection (g) of this
Section 4.1 and in Section 4.13 hereof.
(j) No Accounting. Except to the extent required
by the 1940 Act or under circumstances which would
justify his removal for cause, no Person ceasing to be a
Trustee (nor the estate of any such Person) shall be
required to make an accounting to the Shareholders or
remaining Trustees upon such cessation.
SECTION 4.2. Trustees' Meetings; Participation by
Telephone, etc. An annual meeting of Trustees shall be held not
later than the last day of the fourth month after the end of each
fiscal year of the Trust and special meetings may be held from
time to time, in each case, upon the call of such officers as may
be thereunto authorized by the By-Laws or vote of the Trustees, or
by any two (2) Trustees, or pursuant to a vote of the Trustees
adopted at a duly constituted meeting of the Trustees, and upon
such notice as shall be provided in the By-Laws. The Trustees may
act with or without a meeting, and a written consent to any
matter, signed by a Majority of the Trustees, shall be equivalent
to action duly taken at a meeting of the Trustees, duly called and
held. Except as otherwise provided by the 1940 Act or other
applicable law, or by this Declaration of Trust or the By-Laws,
any action to be taken by the Trustees may be taken by a majority
of the Trustees present at a meeting of Trustees (a quorum,
consisting of at least a Majority of the Trustees, being present),
within or without Massachusetts. If authorized by the By-Laws,
all or any one or more Trustees may participate in a meeting or
the Trustees or any Committee thereof by means of conference
telephone or similar means of communication by means of which all
Persons participating in the meeting can hear each other, and
participation in a meeting pursuant to such means of communication
shall constitute presence in person at such meeting. The minutes
of any meeting thus held shall be prepared in the same manner as a
meeting at which all participants were present in person.
19
SECTION 4.3. Committees; Delegation. The Trustees
shall have power, consistent with their ultimate responsibility to
supervise the affairs of the Trust, to delegate from time to time
to an Executive Committee, and to one or more other Committees, or
to any single Trustee, the doing of such things and the execution
of such deeds or other instruments, either in the name of the
Trust or the names of the Trustees or as their attorney or
attorneys in fact, or otherwise as the Trustees may from time to
time deem expedient, and any agreement, deed, mortgage, lease or
other instrument or writing executed by the Trustee or Trustees or
other Person to whom such delegation was made shall be valid and
binding upon the Trustees and upon the Trust.
SECTION 4.4. Officers. The Trustees shall annually
elect such officers or agents, who shall have such powers, duties
and responsibilities as the Trustees may deem to be advisable, and
as they shall specify by resolution or in the By-Laws. Except as
may be provided in the By-Laws, any officer elected by the
Trustees may be removed at any time with or without cause. Any
two (2) or more offices may be held by the same individual.
SECTION 4.5. Compensation of Trustees and Officers.
The Trustees shall fix the compensation of all officers and
Trustees. Without limiting the generality of any of the
provisions hereof, the Trustees shall be entitled to receive
reasonable compensation for their general services as such, and to
fix the amount of such compensation, and to pay themselves or any
one or more of themselves such compensation for special services,
including legal, accounting, or other professional services, as
they in good faith may deem reasonable. No Trustee or officer
resigning and (except where a right to receive compensation for a
definite future period shall be expressly provided in a written
agreement with the Trust, duly approved by the Trustees) no
Trustee or officer removed shall have any right to any
compensation as such Trustee or officer for any period following
his resignation or removal, or any right to damages on account of
his removal, whether his compensation be by the month, by the year
or otherwise.
SECTION 4.6. Ownership of Shares and Securities of the
Trust. Any Trustee, and any officer, employee or agent of the
Trust, and any organization in which any such Person is
interested, may acquire, own, hold and dispose of Shares of any
Series or Class and other Securities of the Trust for his or its
individual account, and may exercise all rights of a holder of
such Shares or Securities to the same extent and in the same
manner as if such Person were not such a Trustee, officer,
employee or agent of the Trust; subject, in the case of Trustees
and officers, to the same limitations as directors or officers (as
the case may be) of a Massachusetts business corporation; and the
Trust may issue and sell or cause to be issued and sold and may
20
purchase any such Shares or other Securities from any such Person
or any such organization, subject only to the general limitations,
restrictions or other provisions applicable to the sale or
purchase of Shares of such Series or other Securities of the Trust
generally.
SECTION 4.7. Right of Trustees and Officers to Own
Property and to Engage in Business; Authority of Trustees to
Permit Others to Do Likewise. The Trustees, in their capacity as
Trustees, and (unless otherwise specifically directed by vote of
the Trustees) the officers of the Trust in their capacity as such,
shall not be required to devote their entire time to the business
and affairs of the Trust. Except as otherwise specifically
provided by vote of the Trustees, or by agreement in any
particular case, any Trustee or officer of the Trust may acquire,
own, hold and dispose of, for his own individual account, any
property, and acquire, own, hold, carry on and dispose of, for his
own individual account, any business entity or business activity,
whether similar or dissimilar to any property or business entity
or business activity invested in or carried on by the Trust, and
without first offering the same as an investment opportunity to
the Trust, and may exercise all rights in respect thereof as if he
were not a Trustee or officer of the Trust. The Trustees shall
also have power, generally or in specific cases, to permit
employees or agents of the Trust to have the same rights (or
lesser rights) to acquire, hold, own and dispose of property and
businesses, to carry on businesses, and to accept investment
opportunities without offering them to the Trust, as the Trustees
have by virtue of this Section 4.7.
SECTION 4.8. Reliance on Experts. The Trustees and
officers may consult with counsel, engineers, brokers, appraisers,
auctioneers, accountants, investment bankers, securities analysts
or other Persons (any of which may be a firm in which one or more
of the Trustees or officers is or are members or otherwise
interested) whose profession gives authority to a statement made
by them on the subject in question, and who are reasonably deemed
by the Trustees or officers in question to be competent, and the
advice or opinion of such Persons shall be full and complete
personal protection to all of the Trustees and officers in respect
of any action taken or suffered by them in good faith and in
reliance on or in accordance with such advice or opinion. In
discharging their duties, Trustees and officers, when acting in
good faith, may rely upon financial statements of the Trust
represented to them to be correct by any officer of the Trust
having charge of its books of account, or stated in a written
report by an independent certified public accountant fairly to
present the financial position of the Trust. The Trustees and
officers may rely, and shall be personally protected in acting,
upon any instrument or other document believed by them to be
genuine.
21
SECTION 4.9. Surety Bonds. No Trustee, officer,
employee or agent of the Trust shall, as such, be obligated to
give any bond or surety or other security for the performance of
any of his duties, unless required by applicable law or
regulation, or unless the Trustees shall otherwise determine in
any particular case.
SECTION 4.10. Apparent Authority of Trustees and
Officers. No purchaser, lender, transfer agent or other Person
dealing with the Trustees or any officer of the Trust shall be
bound to make any inquiry concerning the validity of any
transaction purporting to be made by the Trustees or by such
officer, or to make inquiry concerning or be liable for the
application of money or property paid, loaned or delivered to or
on the order of the Trustees or of such officer.
SECTION 4.11. Other Relationships Not Prohibited. The
fact that:
(i) any of the Shareholders, Trustees or officers
of the Trust is a shareholder, director, officer,
partner, trustee, employee, manager, adviser, principal
underwriter or distributor or agent of or for any
Contracting Party (as defined in Section 5.2 hereof), or
of or for any parent or affiliate of any Contracting
Party, or that the Contracting Party or any parent or
affiliate thereof is a Shareholder or has an interest in
the Trust or any Portfolio, or that
(ii) any Contracting Party may have a contract
providing for the rendering of any similar services to
one or more other corporations, trusts, associations,
partnerships, limited partnerships or other
organizations, or have other business or interests,
shall not affect the validity of any contract for the performance
and assumption of services, duties and responsibilities to, for or
of the Trust and/or the Trustees 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 to
the holders of Shares of any Series; provided, that, in the case
of any relationship or interest referred to in the preceding
clause (i) on the part of any Trustee or officer of the Trust,
either (x) the material facts as to such relationship or interest
have been disclosed to or are known by the Trustees not having any
such relationship or interest and the contract involved is
approved in good faith by a majority of such Trustees not having
any such relationship or interest (even though such unrelated or
disinterested Trustees are less than a quorum of all of the
Trustees), (y) the material facts as to such relationship or
interest and as to the contract have been disclosed to or are
22
known by the Shareholders entitled to vote thereon and the
contract involved is specifically approved in good faith by vote
of the Shareholders, or (z) the specific contract involved is fair
to the Trust as of the time it is authorized, approved or ratified
by the Trustees or by the Shareholders.
SECTION 4.12. Payment of Trust Expenses. The Trustees
are authorized to pay or to cause to be paid out of the principal
or income of the Trust, or partly out of principal and partly out
of income, and according to any allocation to particular
Portfolios made by them pursuant to Section 6.2(b) hereof, all
expenses, fees, charges, taxes and liabilities incurred or arising
in connection with the business and affairs of the Trust or in
connection with the management thereof, including, but not limited
to, the Trustees' compensation and such expenses and charges for
the services of the Trust's officers, employees, Investment
Adviser, Administrator, Distributor, Principal Underwriter,
auditor, counsel, Custodian, Transfer Agent, Dividend Disbursing
Agent, Accounting Agent, Shareholder Servicing Agent, and such
other agents, consultants, and independent contractors and such
other expenses and charges as the Trustees may deem necessary or
proper to incur.
SECTION 4.13. Ownership of the Trust Property. Legal
title to all the Trust Property shall be vested in the Trustees as
joint tenants, except that the Trustees shall have power to cause
legal title to any Trust Property to be held by or in the name of
one or more of the Trustees, or in the name of the Trust, or of
any particular Portfolio, or in the name of any other Person as
nominee, on such terms as the Trustees may determine; provided,
that the interest of the Trust and of the respective Portfolio
therein is appropriately protected. The right, title and interest
of the Trustees in the Trust Property shall vest automatically in
each Person who may hereafter become a Trustee. Upon the
termination of the term of office of a Trustee as provided in
Section 4.1(c), (d) or (e) hereof, such Trustee shall
automatically cease to have any right, title or interest in any of
the Trust Property, and the right, title and interest of such
Trustee in the Trust Property shall vest automatically in the
remaining Trustees. Such vesting and cessation of title shall be
effective whether or not conveyancing documents have been executed
and delivered pursuant to Section 4.1(i) hereof.
ARTICLE 5
DELEGATION OF MANAGERIAL RESPONSIBILITIES
SECTION 5.1. Appointment; Action by Less than All
Trustees. The Trustees shall be responsible for the general
operating policy of the Trust and for the general supervision of
the business of the Trust conducted by officers, agents, employees
23
or advisers of the Trust or by independent contractors, but the
Trustees shall not be required to conduct all the business of the
Trust in person, and, consistent with their ultimate
responsibility as stated herein, the Trustees may appoint, employ
or contract with one or more officers, employees and agents to
conduct, manage and/or supervise the operations of the Trust, and
may grant or delegate such authority to such officers, employees
and/or agents as the Trustees may, in their sole discretion, deem
to be necessary or desirable, without regard to whether such
authority is normally granted or delegated by trustees. With
respect to those matters of the operation and business of the
Trust which they shall elect to conduct themselves, except as
otherwise provided by this Declaration or the By-Laws, if any, the
Trustees may authorize any single Trustee or defined group of
Trustees, or any committee consisting of a number of Trustees less
than the whole number of Trustees then in office without
specification of the particular Trustees required to be included
therein, to act for and to bind the Trust, to the same extent as
the whole number of Trustees could do, either with respect to one
or more particular matters or classes of matters, or generally.
SECTION 5.2. Certain Contracts. Subject to compliance
with the provisions of the 1940 Act, but notwithstanding any
limitations of present and future law or custom in regard to
delegation of powers by trustees generally, the Trustees may, at
any time and from time to time in their discretion and without
limiting the generality of their powers and authority otherwise
set forth herein, enter into one or more contracts with any one or
more corporations, trusts, associations, partnerships, limited
partnerships or other types of organizations, or individuals
("Contracting Party"), to provide for the performance and
assumption of some or all of the following services, duties and
responsibilities to, for or on behalf of the Trust and/or any
Portfolio, and/or the Trustees, and to provide for the performance
and assumption of such other services, duties and responsibilities
in addition to those set forth below, as the Trustees may deem
appropriate:
(a) Advisory. One or more investment advisory or
management agreements, each with an investment manager or
adviser (each, an "Investment Adviser"), whereby the
Investment Adviser shall undertake to furnish the Trust
such management, investment advisory or supervisory,
administrative, accounting, legal, statistical and
research facilities and services, and such other
facilities and services, if any, as the Trustees shall
from time to time consider desirable, all upon such terms
and conditions as the Trustees may in their discretion
determine to be not inconsistent with this Declaration,
the applicable provisions of the 1940 Act or any
applicable provisions of the By-Laws. Any such advisory
24
or management agreement and any amendment thereto shall
be subject to approval by a Majority Shareholder Vote at
a meeting of the Shareholders of the Trust.
Notwithstanding any provisions of this Declaration, the
Trustees may authorize the Investment Adviser (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 of the Trust
on behalf of the Trustees or may authorize any officer or
employee of the Trust or any Trustee to effect such
purchases, sales, loans or exchanges pursuant to
recommendations of the Investment Adviser (and all
without further action by the Trustees). Any such
purchases, sales, loans and exchanges shall be deemed to
have been authorized by all of the Trustees. The
Trustees may, in their sole discretion, call a meeting of
Shareholders in order to submit to a vote of Shareholders
at such meeting the approval of continuance of any such
investment advisory or management agreement. If the
Shareholders of any Portfolio should fail to approve any
such investment advisory or management agreement, the
Investment Adviser may nonetheless serve as Investment
Adviser with respect to any other Portfolio whose
Shareholders shall have approved such contract.
(b) Administration. One or more agreements, each
with a provider of administrative and clerical services
whereby the other party shall, as agent for the Trustees,
but subject to the general supervision of the Trustees
and in conformity with any policies of the Trustees with
respect to the operations of the Trust and each
Portfolio, supervise all or any part of the operations of
the Trust and each Portfolio, and will provide all or any
part of the administrative and clerical personnel, office
space and office equipment and services appropriate for
the efficient administration and operations of the Trust
and each Portfolio (any such agent being herein referred
to as an "Administrator").
(c) Distribution. One or more agreements, each
with a broker or dealer in securities providing for the
sale of Shares of any one or more Series or Classes of
any Series to net the Trust not less than the net asset
value per Share (as described in Section 6.2(g) hereof)
and pursuant to which the Trust may appoint the other
party to such agreement as its principal underwriter or
sales agent for the distribution of such Shares. The
agreement shall contain such terms and conditions as the
Trustees may in their discretion determine to be not
inconsistent with this Declaration, the applicable
provisions of the 1940 Act and any applicable provisions
25
of the By-Laws (any such underwriter or sales agent being
herein referred to as a "Principal Underwriter" or a
"Distributor", as the case may be).
(d) Custodian. One or more agreements, each with a
bank or trust company having an aggregate capital,
surplus and undivided profits (as shown in its last
published report) of at least two million dollars
($2,000,000) as custodian of the Securities and cash of
the Trust and of each Portfolio and of the accounting
records in connection therewith (any bank or trust
company so appointed being herein referred to as a
"Custodian").
(e) Transfer and Dividend Disbursing Agency. One
or more agreements, each with an agent to maintain
records of the ownership of outstanding Shares, and the
issuance and redemption and the transfer thereof (any
such agent being herein referred to as a "Transfer
Agent"), and to disburse any dividends declared by the
Trustees and in accordance with the policies of the
Trustees and/or the instructions of any particular
Shareholder to reinvest any such dividends (any such
agent being herein referred to as a "Dividend Disbursing
Agent").
(f) Shareholder Servicing. One or more agreements,
each with an agent to provide service with respect to the
relationship of the Trust and its Shareholders, records
with respect to Shareholders and their Shares, and
similar matters (any such agent being herein referred to
as a "Shareholder Servicing Agent").
(g) Accounting. One or more agreements, each with
an agent to handle all or any part of the accounting
responsibilities, whether with respect to the Trust's
properties, Shareholders or otherwise (any such agent
being herein referred to as an "Accounting Agent").
The same Person may be the Contracting Party for some or all of
the services, duties and responsibilities to, for and of the Trust
and/or the Trustees, and the contracts with respect thereto may
contain such terms interpretive of or in addition to the
delineation of the services, duties and responsibilities provided
for, including provisions that are not inconsistent with the 1940
Act relating to the standard of duty of and the rights to
indemnification of the Contracting Party and others, as the
Trustees may determine. Nothing herein shall preclude, prevent or
limit the Trust or a Contracting Party from entering into sub-
contractual arrangements relative to any of the matters referred
to in subsections (a) through (g) of this Section 5.2.
26
ARTICLE 6
PORTFOLIOS AND SHARES
SECTION 6.1. Description of Portfolios and Shares.
(a) Shares; Portfolios; Series and Classes of Shares.
The beneficial interest in the Trust shall be divided into Shares
having a nominal or par value of one cent ($.01) per Share, of
which an unlimited number may be issued. The Trustees shall have
the power and authority, without any requirement of Shareholder
approval, from time to time to establish and designate one or more
separate, distinct and independent Portfolios, in addition to the
Portfolios established and designated by Section 6.2 hereof, into
which the assets of the Trust shall be divided, to authorize a
separate Series of Shares for each such additional Portfolio (each
of which Series shall represent interests only in the Portfolio
for which such Series was authorized), and to authorize two or
more separate Classes of Shares of any such Series, as they deem
necessary or desirable. The Trustees shall have the power to
classify or reclassify any unissued Shares of any Series, or any
Shares of any Series previously issued and reacquired by the Trust
(including in either case any Shares of the Portfolios established
and designated by Section 6.2 hereof) into any number of
additional Classes of such Series by from time to time setting or
changing in one or more respects provisions applicable to such
Class or Classes relating to sales charges, any rights of
redemption and the price, terms and manner of redemption, special
and relative rights as to dividends and other distributions and on
liquidation, sinking or purchase fund provisions and conversion
rights, and (subject to Article 7 hereof) the conditions under
which the Shareholders of the several Classes shall have separate
voting rights or no voting rights. Except as otherwise provided
as to a particular Portfolio herein or in the Certificate of
Designation therefor, the Trustees shall have all the rights and
powers, and be subject to all the duties and obligations, with
respect to each such Portfolio and the assets and affairs thereof
as they have under this Declaration with respect to the Trust and
the Trust Property in general.
(b) Establishment, etc. of Portfolios; Authorization of
Shares. In order to establish and designate any Portfolio in
addition to the Portfolios established and designated by
Section 6.2 hereof, and to authorize the Shares thereof, a
Majority of the Trustees (or an officer of the Trust pursuant to
the vote of a Majority of the Trustees) shall execute an
instrument setting forth such establishment and designation and
the relative rights and preferences of the Shares of the Series
representing interests in such Portfolio and the manner in which
the same may be amended (a "Certificate of Designation"), which
may provide that the number of Shares of such Series or any Class
27
thereof which may be issued is unlimited, or may limit the number
issuable. At any time that there are outstanding no Shares of any
particular Series or Class previously established and designated,
including any Class of the Portfolios established and designated
by Section 6.2 hereof, and also, in the case of any Class of a
Series, of which there are outstanding no Shares of any other
Class of such Series which are convertible into Shares of the
particular Class, the Trustees may by an instrument executed by a
Majority of the Trustees (or by an officer of the Trust pursuant
to the vote of a Majority of the Trustees) terminate such Series
or Class and the establishment and designation thereof and the
authorization of its Shares (a "Certificate of Termination").
Each Certificate of Designation or Certificate of Termination and
any instrument amending a Certificate of Designation shall have
the status of an amendment to this Declaration of Trust, and shall
be filed and become effective as provided in Section 9.4 hereof.
(c) Character of Separate Portfolios and Shares Thereof.
Each Portfolio established hereunder shall be a separate component
of the assets of the Trust, and the holders of Shares of the
Series representing interests in that Portfolio shall be
considered Shareholders of such Portfolio, but such Shareholders
shall also be considered Shareholders of the Trust for purposes of
receiving reports and notices and, except as otherwise provided
herein or in the Certificate of Designation of a particular
Portfolio as to such Portfolio, or as required by the 1940 Act or
other applicable law, the right to vote, all without distinction
by Series.
(d) Consideration for Shares. The Trustees may issue
Shares of any Series for such consideration (which may include
property subject to, or acquired in connection with the assumption
of, liabilities) and on such terms as they may determine (or for
no consideration if pursuant to a Share dividend or split-up), all
without action or approval of the Shareholders. All Shares when
so issued on the terms determined by the Trustees shall be fully
paid and nonassessable (but may be subject to mandatory
contribution back to the Trust as provided in Section 6.2(g)
hereof).
SECTION 6.2. Establishment and Designation of Certain
Portfolios; General Provisions for All Portfolios. Without
limiting the authority of the Trustees set forth in Section 6.1(a)
hereof to establish and designate additional Portfolios, there are
hereby established and designated the Florida Portfolio, the
Minnesota Portfolio, the New Jersey Portfolio, the Pennsylvania
Portfolio and the Ohio Portfolio (collectively, the "Initial
Portfolios", and each singly, an "Initial Portfolio"), the Shares
of each of which shall be divided into three separate Classes,
designated Class A, Class B and Class C, which shall represent
interests only in the respective Initial Portfolio. An unlimited
28
number of Shares of each such Class may be issued. Subject to the
power of the Trustees to classify or reclassify any unissued
Shares of a Series pursuant to Section 6.1(a) above, the Shares of
the Initial Portfolios, and the Shares of any further Portfolios
that may from time to time be established and designated by the
Trustees, shall (unless the Trustees otherwise determine with
respect to some further Portfolio at the time of establishing and
designating the same) have the following relative rights and
preferences:
(a) Assets Belonging to Portfolios. Any portion of
the Trust Property allocated to a particular Portfolio,
and all consideration received by the Trust for the issue
or sale of Shares of such Portfolio, together with all
assets in which such consideration is invested or
reinvested, all interest, dividends, income, earnings,
profits and gains therefrom, 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 by the
Trustees in trust for the benefit of the holders of
Shares of that Portfolio and shall irrevocably belong to
that Portfolio for all purposes, and shall be so recorded
upon the books of account of the Trust, and the
Shareholders of such Portfolio shall not have, and shall
be conclusively deemed to have waived, any claims to the
assets of any Portfolio of which they are not
Shareholders. Such consideration, assets, interest,
dividends, income, earnings, profits, gains and proceeds,
together with any General Items allocated to that
Portfolio as provided in the following sentence, are
herein referred to collectively as "Portfolio Assets" of
such Portfolio, and as assets "belonging to" that
Portfolio. If the Trust shall have or realize any
assets, interest, dividends, income, earnings, profits,
gains or proceeds which are not readily identifiable as
belonging to any particular Portfolio (collectively,
"General Items"), the Trustees shall allocate such
General Items to and among any one or more of the
Portfolios of the Trust in such manner and on such basis
as they, in their sole discretion, deem fair and
equitable; and any General Items so allocated to a
particular Portfolio shall belong to and be part of the
Portfolio Assets of that Portfolio. Each such allocation
by the Trustees shall be conclusive and binding upon the
Shareholders of all Portfolios for all purposes.
(b) Liabilities of Portfolios. The assets
belonging to each Portfolio shall be charged with the
liabilities incurred by or arising in respect of that
29
Portfolio, and all expenses, costs, charges and reserves
attributable to that Portfolio, and any general
liabilities, expenses, costs, charges or reserves of the
Trust which are not readily identifiable as pertaining to
any particular Portfolio shall be allocated and charged
by the Trustees to and among any one or more of the
Portfolios of the Trust in such manner and on such basis
as the Trustees in their sole discretion deem fair and
equitable. The liabilities, expenses, costs, charges and
reserves so allocated and so charged to a particular
Portfolio are herein referred to as "liabilities of" that
Portfolio. Each allocation of liabilities, expenses,
costs, charges and reserves by the Trustees shall be
conclusive and binding upon the Shareholders of all
Portfolios for all purposes. The creditors of a
particular Portfolio may look only to the assets of that
Portfolio to satisfy such creditors' claims, and the
creditors of a particular Class of a Portfolio may look
only to the share of that Class in the assets of the
Portfolio of which it is a part to satisfy their claims.
(c) Dividends. Dividends and distributions on
Shares of a particular Portfolio may be paid with such
frequency as the Trustees may determine, which may be
daily or otherwise pursuant to a standing resolution or
resolutions adopted only once or with such frequency as
the Trustees may determine, to the holders of Shares of
that Portfolio, from such of the income, accrued or
realized, and capital gains, realized or unrealized, and
out of the assets belonging to such Portfolio, as the
Trustees may determine, after providing for actual and
accrued liabilities of that Portfolio. Dividends and
distributions on Shares of a Portfolio without separate
Classes of Shares shall be distributed pro rata to the
holders of Shares of that Portfolio in proportion to the
number of such Shares held by such holders at the date
and time of record established for the payment of such
dividends or distributions. Dividends and distributions
on the Shares of a Portfolio having separate Classes of
Shares shall be in such amount as may be declared from
time to time by the Trustees, and such dividends and
distributions may vary as between such Classes to reflect
differing allocations among such Classes of the
liabilities, expenses, costs, charges and reserves of
such Portfolio, and any resultant differences between the
net asset value of such several Classes, to such extent
and for such purposes as the Trustees may deem
appropriate, but dividends and distributions on the
Shares of a particular Class shall be distributed pro
rata to the Shareholders of that Class in proportion to
the number of such Shares held by such holders at the
30
date and time of record established for the payment of
such dividends and distributions. Notwithstanding the
last two preceding sentences, the Trustees may determine,
in connection with any dividend or distribution program
or procedure, that no dividend or distribution shall be
payable on newly-purchased Shares as to which the
purchase order and/or payment have not been received by
the time or times established by the Trustees under such
program or procedure, or that dividends or distributions
shall be payable on Shares which have been tendered by
the holder thereof for redemption or repurchase, but the
redemption or repurchase proceeds of which have not yet
been paid to such Shareholder. Dividends and
distributions on the Shares of a Portfolio may be made in
cash or Shares of any Class of that Portfolio or a
combination thereof as determined by the Trustees, or
pursuant to any program that the Trustees may have in
effect at the time for the election by each Shareholder
of the mode of the making of such dividend or
distribution to that Shareholder. Any such dividend or
distribution paid in Shares will be paid at the net asset
value thereof as determined in accordance with subsection
(g) of this Section 6 2.
(d) Liquidation. In the event of the liquidation
or dissolution of the Trust, the Shareholders of each
Portfolio of which Shares are outstanding shall be
entitled to receive, when and as declared by the
Trustees, the excess of the Portfolio Assets over the
liabilities of such Portfolio. The assets so
distributable to the Shareholders of any Portfolio
without separate Classes of Shares shall be distributed
among such Shareholders in proportion to the number of
Shares of that Portfolio held by them and recorded on the
books of the Trust. The assets so distributable to the
Shareholders of any Portfolio having separate Classes of
Shares shall be allocated among such Classes in
proportion to the respective aggregate net asset value of
the outstanding Shares thereof, and shall be distributed
to the Shareholders of each such Class in proportion to
the number of Shares of that Class held by them and
recorded on the books of the Trust. The liquidation of
any Portfolio, or any Class of any Portfolio, may be
authorized by vote of a Majority of the Trustees, subject
to the affirmative vote of "a majority of the outstanding
voting securities" of that Portfolio or Class, as the
quoted phrase is defined in the 1940 Act, determined in
accordance with clause (iii) of the definition of
"Majority Shareholder Vote" in Section 1.4 hereof.
31
(e) Redemption by Shareholder. Each holder of
Shares of a particular Series or Class shall have the
right at such times as may be permitted by the Trust, but
no less frequently than once each week, to require the
Trust to redeem all or any part of such Shares at a
redemption price equal to the net asset value per Share
of that Series or Class next determined in accordance
with subsection (g) of this Section 6.2 after the Shares
are properly tendered for redemption; provided, that the
Trustees may from time to time, in their discretion,
determine and impose a fee for such redemption, and the
proceeds of the redemption of Shares (including a
fractional Share) of any Series or Class shall be reduced
by the amount of any applicable contingent deferred sales
charge payable on such redemption pursuant to the terms
of the initial issuance of the Shares of such Series or
Class (to the extent consistent with the 1940 Act or
regulations or exemptions thereunder). The redemption
price of Shares redeemed under this subsection (e) shall
be paid in cash; provided, however, that if the Trustees
determine, which determination shall be conclusive, that
conditions exist with respect to any Portfolio, or one or
more Classes of any Portfolio, which make payment wholly
in cash unwise or undesirable, the Trust may make payment
wholly or partly in Securities or other assets belonging
to such Portfolio, or to the Portfolio of which such
Class or Classes are a part, at the value of such
Securities or assets used in such determination of net
asset value. Notwithstanding the foregoing, the Trust
may postpone payment of the redemption price and may
suspend the right of the holders of Shares of any Series
or Class to require the Trust to redeem Shares of that
Series or Class during any period or at any time when and
to the extent permissible under the 1940 Act.
(f) Redemption at the Option of the Trust. Each
Share of any Portfolio shall be subject to redemption at
the option of the Trust at the redemption price which
would be applicable if such Share were then being
redeemed by the Shareholder pursuant to subsection (e) of
this Section 6.2: (i) at any time, if the Trustees
determine in their sole discretion that failure to so
redeem may have materially adverse consequences to the
holders of the Shares of the Trust or of any Portfolio,
or (ii) upon such other conditions with respect to
maintenance of Shareholder accounts of a minimum amount
as may from time to time be determined by the Trustees
and set forth in the then-current Prospectus of such
Portfolio. Upon such redemption the holders of the
Shares so redeemed shall have no further right with
32
respect thereto other than to receive payment of such
redemption price.
(g) Net Asset Value. Subject to the provisions of
the two sentences immediately following, the net asset
value per Share of any Portfolio without Classes, or of
any Class of a Portfolio having separate Classes of
Shares, at any time shall be the quotient obtained by
dividing the value of the net assets of such Portfolio or
the share of such Class in such assets, as the case may
be, at such time (being the current value of the assets
belonging to such Portfolio, or the share of such Class
therein, less the then-existing liabilities of such
Portfolio, or the share of such Class in such
liabilities) by the total number of Shares of that
Portfolio or Class then outstanding, all determined in
accordance with the methods and procedures, including
without limitation those with respect to rounding,
established by the Trustees from time to time. The
aggregate net asset value of the several Classes of a
Portfolio having separate Classes of Shares shall be
separately computed, and may vary from one another. The
Trustees shall establish procedures for the allocation of
investment income or capital gains and expenses and
liabilities of a Portfolio having separate Classes of
Shares among the several Classes of such Portfolio, in
order to reflect the varying net asset values of, and the
liabilities and expenses attributable to, such Classes.
The Trustees may determine to maintain the net asset
value per Share of any Portfolio at a designated constant
dollar amount and in connection therewith may adopt
procedures not inconsistent with the 1940 Act for the
continuing declaration of income attributable to that
Portfolio as dividends payable in additional Shares of
that Portfolio at the designated constant dollar amount
and for the handling of any losses attributable to that
Portfolio. Such procedures may provide that in the event
of any loss each Shareholder shall be deemed to have
contributed to the shares of beneficial interest account
of that Portfolio such Shareholder's pro rata portion of
the total number of Shares required to be canceled in
order to permit the net asset value per Share of that
Portfolio to be maintained, after reflecting such loss,
at the designated constant dollar amount. Each
Shareholder of the Trust shall be deemed to have
expressly agreed, by investing in any Portfolio with
respect to which the Trustees shall have adopted any such
procedure, to make the contribution referred to in the
preceding sentence in the event of any such loss.
33
(h) Transfer. All Shares of the Trust shall be
transferable, but transfers of Shares of a particular
Portfolio will be recorded on the Share transfer records
of the Trust applicable to that Portfolio only at such
times as Shareholders shall have the right to require the
Trust to redeem Shares of that Portfolio and at such
other times as may be permitted by the Trustees.
(i) Equality. All Shares of each Portfolio without
Classes shall represent an equal proportionate interest
in the assets belonging to that Portfolio, subject to the
liabilities of that Portfolio, and each Share of any such
Portfolio shall be equal to each other Share thereof.
All Shares of each Class of Shares of any Portfolio
having separate Classes of Shares shall represent an
equal proportionate interest in the share of such Class
in the assets belonging to that Portfolio, subject to a
like share of the liabilities of such Portfolio, adjusted
for any liabilities specifically allocable to that Class,
and each Share of any such Class shall be equal to each
other Share thereof; but the interests represented by the
Shares of the different Classes of a Portfolio having
separate Classes of Shares shall reflect any distinctions
among the several Classes of such Portfolio existing
under this Section 6.2 or Section 7.1 hereof, or under
the Certificate of Designation for such Portfolio. The
Trustees may from time to time divide or combine the
Shares of any Portfolio, or any Class of any Portfolio,
into a greater or lesser number of Shares of that
Portfolio or Class without thereby changing the
proportionate beneficial interest in the assets belonging
to that Portfolio or in any way affecting the rights of
the holders of Shares of any other Portfolio or Class.
(j) Rights of Fractional Shares. Any fractional
Share of any Series or Class of Shares shall carry
proportionately all the rights and obligations of a whole
Share of that Series or Class, including rights and
obligations with respect to voting, receipt of dividends
and distributions, redemption of Shares, and liquidation
of the Trust or of the Portfolio or Class to which such
Shares pertain.
(k) Conversion Rights; Conversion of Class B Shares
of the Portfolios. (i) Subject to compliance with the
requirements of the 1940 Act, the Trustees shall have the
authority to provide (A) that holders of Shares of any
Portfolio shall have the right to convert said Shares
into Shares of any other investment company registered as
such under the 1940 Act and designated for that purpose
(an "Eligible Investment Company") in the Trust's
34
prospectus for the Shares being converted, (B) that
holders of any Class of Shares of a Portfolio shall have
the right to convert such Shares into Shares of one or
more other Classes of such Portfolio, and (C) that Shares
of any Class of a Portfolio shall be automatically
converted into Shares of another Class of such Portfolio,
in each case in accordance with such requirements and
procedures as the Trustees may establish.
(ii) Without limitation of the foregoing, each
Class B Share of any Portfolio, other than Shares
purchased through the automatic reinvestment of dividends
or distributions with respect to the Class B Shares of
such Portfolio, shall be converted automatically, and
without any action or choice on the part of the holder
thereof, into Class A Shares of such Portfolio on the
Conversion Date thereof, established as provided in the
next succeeding sentence. The term "Conversion Date", as
to any Class B Share, shall mean either (i) the date that
is the first Trust business day in the month following
the month which includes the sixth anniversary of the
Original Purchase Date thereof, determined as provided in
the next succeeding sentence, or (ii) any such other date
as may be determined by the Trustees and set forth in the
Trust's prospectus with respect to the Class B Shares, as
the same may be amended from time to time; provided, that
any such other date determined by the Trustees is one
that will occur prior to both (A) the date determined as
provided in clause (i) of this sentence and (B) any other
date theretofore determined by the Trustees pursuant to
this clause (ii). The "Original Purchase Date" of a
Class B Share shall be the date on which such Share was
first subscribed and paid for by such holder; provided,
that if such Share was obtained by the holder through an
exchange of Shares of another Eligible Investment
Company, the Original Purchase Date shall be the Original
Purchase Date of the Class B Shares of such other
Eligible Investment Company, or if the Shares of such
other Eligible Investment Company were held as the result
of a series of exchanges, the Original Purchase Date of
the Class B Shares of the Eligible Investment Company to
which the holder originally subscribed. Class B Shares
of a Portfolio purchased through the automatic
reinvestment of a dividend or a distribution with respect
to the Class B Shares of such Portfolio shall be
segregated in a separate sub-account on the share records
of the Trust for each of the Shareholders of record
thereof. On any Conversion Date, a number of the Shares
held in the sub-account of the Shareholder of record of
the Share or Shares being converted, calculated in
accordance with the next following sentence, shall be
35
converted automatically, and without any action or choice
on the part of the Shareholder, into Class A Shares of
such Portfolio. The number of shares in the
Shareholder's sub-account so converted shall bear the
same relation to the total number of Shares maintained in
the sub-account on the Conversion Date (immediately prior
to conversion) as the number of Shares of the Shareholder
converted on the Conversion Date pursuant to paragraph
(i) of this subsection (k) bears to the total number of
Class B Shares of such Portfolio held by the Shareholder
on the Conversion Date (immediately prior to conversion)
not purchased through the automatic reinvestment of
dividends or distributions with respect to the Class B
Shares of such Portfolio.
(iii) The number of Class A Shares of any
Portfolio into which a Class B Share of such Portfolio is
converted pursuant to paragraph (ii) of this subsection
(k) shall be the quotient (including for this purpose
fractions of a Share) obtained by dividing the net asset
value per Share of the Class B Shares by the net asset
value per Share of the Class A Shares, each determined as
of the close of business on the Conversion Date of such
Class B Shares.
(iv) Class B Shares of any Portfolio converted
into Class A Shares of such Portfolio will cease to
accrue dividends at the close of business on the
Conversion Date thereof, and will thenceforth no longer
be deemed outstanding, and the rights of the holders
thereof (except (A) the right to receive the number of
Class A Shares into which such Class B Shares have been
converted and (B) dividends declared on such Class B
Shares but not paid prior to the close of business on
such Conversion Date), and (C) the right to vote or to
give any consent in respect of Class B Shares so
converted that were held as of any record date occurring
before the Conversion Date and theretofore set with
respect to any meeting held or any written consent for
which the final date is set after the Conversion Date)
will cease, and such holder shall instead have all rights
of a holder of Class A Shares in respect of the Class A
Shares issuable upon such conversion, effective from and
after the close of business on such Conversion Date.
Certificates representing Class A Shares resulting from
the conversion need not be issued until certificates
representing Class B Shares converted, if issued, have
been received by the Trust or its agent, duly endorsed
for transfer.
36
(v) The Trust will appropriately reflect the
conversion of Class B Shares of any Portfolio into
Class A Shares of such Portfolio on the first periodic
statements of account sent to Shareholders of record
affected which provide account information with respect
to a reporting period which includes the Conversion Date.
(vi) Without limiting the generality of the
foregoing, except as otherwise expressly provided by the
Trustees pursuant to paragraph (i) of this subsection
(k), neither the Class A Shares nor the Class C Shares of
any Portfolio shall be convertible into shares of any
other Class or Series.
(l) Suspension of Automatic Conversion of Class B
Shares. Notwithstanding the provisions of subsection (k) of this
Section 6.2, the automatic conversion of Class B Shares into
Class A Shares shall be subject to suspension, as follows:
(i) Such conversion shall be suspended at any time
that the Trustees determine (i) that there is not
available a reasonably satisfactory opinion of counsel to
the effect that, under the Internal Revenue Code (x) the
assessment of the higher distribution services fee and
transfer agency costs with respect to the Class B Shares
does not result in the Trust's dividends or distributions
constituting a "preferential dividend", and (y) the
conversion of the Class B Shares does not constitute a
taxable event, or (ii) any other condition to converstion
set forth in the Trust's prospectus for the Class B
Shares, as such prospectus may be amended from time to
time, is not satisfied; and
(ii) Such conversion may be suspended at any time
that the Trustees determine such suspension to be
appropriate in order to comply with, or satisfy the
requirements of, the 1940 Act, relating to voting by the
holders of the Class B Shares on any plan with respect to
the Class A Shares proposed pursuant to Rule 12b-1 under
the 1940 Act, and in connection with, or in lieu of, any
such suspension, the Trustees may provide holders of
Class B Shares with alternative conversion or exchange
rights into other Classes or Series of Shares of the
Trust in a manner consistent with the provision of the
1940 Act giving rise to the possible suspension of such
conversion right.
SECTION 6.3. Ownership of Shares. The ownership of
Shares shall be recorded on the books of the Trust or of a
Transfer Agent or similar agent for the Trust, which books shall
be maintained separately for the Shares of each Series that has
37
been authorized. Certificates evidencing the ownership of Shares
need not be issued except as the Trustees may otherwise determine
from time to time, and the Trustees shall have power to call
outstanding Share certificates and to replace them with book
entries. The Trustees may make such rules as they consider
appropriate for the issuance of Share certificates, the use of
facsimile signatures, the transfer of Shares and similar matters.
The record books of the Trust as kept by the Trust or any Transfer
Agent or similar agent, as the case may be, shall be conclusive as
to who are the Shareholders and as to the number of Shares of each
Portfolio held from time to time by each such Shareholder.
The holders of Shares of each Portfolio shall upon demand
disclose to the Trustees in writing such information with respect
to their direct and indirect ownership of Shares of such Portfolio
as the Trustees deem necessary to comply with the provisions of
the Internal Revenue Code, or to comply with the requirements of
any other authority.
SECTION 6.4. Investments in the Trust. The Trustees
may accept investments in any Portfolio of the Trust from such
Persons and on such terms and for such consideration, not
inconsistent with the provisions of the 1940 Act, as they from
time to time authorize. The Trustees may authorize any
Distributor, Principal Underwriter, Custodian, Transfer Agent or
other Person to accept orders for the purchase of Shares that
conform to such authorized terms and to reject any purchase orders
for Shares, whether or not conforming to such authorized terms.
SECTION 6.5. No Pre-emptive Rights. No Shareholder, by
virtue of holding Shares of any Portfolio, shall have any pre-
emptive or other right to subscribe to any additional Shares of
that Portfolio, or to any shares of any other Portfolio, or any
other Securities issued by the Trust.
SECTION 6.6. Status of Shares. Every Shareholder, by
virtue of having become a Shareholder, shall be held to have
expressly assented and agreed to the terms hereof and to have
become a party hereto. Shares shall be deemed to be personal
property, giving only the rights provided herein. 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 partners. The
death of a Shareholder during the continuance of the Trust shall
not operate to terminate the Trust or any Portfolio, nor entitle
the representative of any deceased Shareholder to an accounting or
to take any action in court or elsewhere against the Trust or the
Trustees, but only to the rights of said decedent under this
Declaration of Trust.
38
ARTICLE 7
SHAREHOLDERS' VOTING POWERS AND MEETINGS
SECTION 7.1. Voting Powers. The Shareholders shall
have power to vote only (i) for the election or removal of
Trustees as provided in Sections 4.1(c) and (e) hereof, (ii) with
respect to the approval or termination in accordance with the 1940
Act of any contract with a Contracting Party as provided in
Section 5.2 hereof as to which Shareholder approval is required by
the 1940 Act, (iii) with respect to any termination or
reorganization of the Trust or any Portfolio to the extent and as
provided in Sections 9.1 and 9.2 hereof, (iv) with respect to any
amendment of this Declaration of Trust to the extent and as
provided in Section 9.3 hereof, (v) to the same extent as the
stockholders of a Massachusetts business corporation as to whether
or not a court action, proceeding or claim should or should not be
brought or maintained derivatively or as a class action on behalf
of the Trust or any Portfolio, or the Shareholders of any of them
(provided, however, that a Shareholder of a particular Portfolio
shall not in any event be entitled to maintain a derivative or
class action on behalf of any other Portfolio or the Shareholders
thereof), and (vi) with respect to such additional matters
relating to the Trust as may be required by the 1940 Act, this
Declaration of Trust, the By-Laws or any registration of the Trust
with the Commission (or any successor agency) or any State, or as
the Trustees may consider necessary or desirable. If and to the
extent that the Trustees shall determine that such action is
required by law or by this Declaration, they shall cause each
matter required or permitted to be voted upon at a meeting or by
written consent of Shareholders to be submitted to a separate vote
of the outstanding Shares of each Portfolio entitled to vote
thereon; provided, that (i) when expressly required by the 1940
Act or other law, actions of Shareholders shall be taken by Single
Class Voting of all outstanding Shares of each Series and Class
whose holders are entitled to vote thereon, and (ii) when the
Trustees determine that any matter to be submitted to a vote of
Shareholders affects only the rights or interests of Shareholders
of one or more but not all Portfolios or of one or more but not
all Classes of a single Portfolio (including without limitation
any distribution plan pursuant to Rule 12b-1 under the 1940 Act
applicable to any such Portfolio or Class), then only the
Shareholders of the Portfolios or Classes so affected shall be
entitled to vote thereon. Without limiting the generality of the
foregoing, and except as required by the 1940 Act or other law,
the Shareholders of each Class shall have exclusive voting rights
with respect to the provisions of any distribution plan adopted by
the Trustees pursuant to Rule 12b-1 under the 1940 Act (a "Plan")
applicable to such Class.
39
SECTION 7.2. Number of Votes and Manner of Voting;
Proxies. On each matter submitted to a vote of the Shareholders,
each holder of Shares of any Series shall be entitled to a number
of votes equal to the number of Shares of such Series standing in
his name on the books of the Trust. There shall be no cumulative
voting in the election of Trustees. Shares may be voted in person
or by proxy. A proxy with respect to Shares held in the name of
two (2) or more Persons shall be valid if executed by any one of
them unless at or prior to exercise of the proxy the Trust
receives a specific written notice to the contrary from any one of
them. A proxy purporting to be executed by or on behalf of a
Shareholder shall be deemed valid unless challenged at or prior to
its exercise and the burden of proving invalidity shall rest on
the challenger. Until Shares are issued, the Trustees may
exercise all rights of Shareholders and may take any action
required by law, this Declaration of Trust or the By-Laws to be
taken by Shareholders.
SECTION 7.3. Meetings. Meetings of Shareholders may be
called by the Trustees from time to time for the purpose of taking
action upon any matter requiring the vote or authority of the
Shareholders as herein provided, or upon any other matter deemed
by the Trustees to be necessary or desirable. Written notice of
any meeting of Shareholders shall be given or caused to be given
by the Trustees by mailing such notice at least seven (7) days
before such meeting, postage prepaid, stating the time, place and
purpose of the meeting, to each Shareholder at the Shareholder's
address as it appears on the records of the Trust. The Trustees
shall promptly call and give notice of a meeting of Shareholders
for the purpose of voting upon removal of any Trustee of the Trust
when requested to do so in writing by Shareholders holding not
less than ten percent (10%) of the Shares then outstanding. If
the Trustees shall fail to call or give notice of any meeting of
Shareholders for a period of thirty (30) days after written
application by Shareholders holding at least ten percent (10%) of
the Shares then outstanding requesting that a meeting be called
for any other purpose requiring action by the Shareholders as
provided herein or in the By-Laws, then Shareholders holding at
least ten percent (10%) of the Shares then outstanding may call
and give notice of such meeting, and thereupon the meeting shall
be held in the manner provided for herein in case of call thereof
by the Trustees.
SECTION 7.4. Record Dates. For the purpose of
determining the Shareholders who are entitled to vote or act at
any meeting or any adjournment thereof, or who are entitled to
participate in any dividend or distribution, or for the purpose of
any other action, the Trustees may from time to time close the
transfer books for such period, not exceeding thirty (30) days
(except at or in connection with the termination of the Trust), as
the Trustees may determine; or without closing the transfer books
40
the Trustees may fix a date and time not more than sixty (60) days
prior to the date of any meeting of Shareholders or other action
as the date and time of record for the determination of
Shareholders entitled to vote at such meeting or any adjournment
thereof or to be treated as Shareholders of record for purposes of
such other action, and any Shareholder who was a Shareholder at
the date and time so fixed shall be entitled to vote at such
meeting or any adjournment thereof or to be treated as a
Shareholder of record for purposes of such other action, even
though he has since that date and time disposed of his Shares, and
no Shareholder becoming such after that date and time shall be so
entitled to vote at such meeting or any adjournment thereof or to
be treated as a Shareholder of record for purposes of such other
action.
SECTION 7.5. Quorum and Required Vote. A majority of
the Shares entitled to vote on a matter shall be a quorum for the
transaction of business with respect to such matter at a
Shareholders' meeting, but any lesser number shall be sufficient
for adjournments. Any adjourned session or sessions may be held
within a reasonable time after the date set for the original
meeting without the necessity of further notice. A Majority
Shareholder Vote at a meeting of which a quorum is present shall
decide any question, except when a different vote is required or
permitted by any provision of the 1940 Act or other applicable law
or by this Declaration of Trust or the By-Laws, or when the
Trustees shall in their discretion require a larger vote or the
vote of a majority or larger fraction of the Shares of one or more
particular Series or Classes.
SECTION 7.6. Action by Written Consent. Subject to the
provisions of the 1940 Act and other applicable law, any action
taken by Shareholders may be taken without a meeting if a majority
of Shareholders entitled to vote on the matter (or such larger
proportion thereof or of the Shares of any particular Series as
shall be required by the 1940 Act or by any express provision of
this Declaration of Trust or the By-Laws or as shall be permitted
by the Trustees) consent to the action in writing and if the
writings in which such consent is given are filed with the records
of the meetings of Shareholders, to the same extent and for the
same period as proxies given in connection with a Shareholders'
meeting. Such consent shall be treated for all purposes as a vote
taken at a meeting of Shareholders.
SECTION 7.7. Inspection of Records. The records of the
Trust shall be open to inspection by Shareholders to the same
extent as is permitted stockholders of a Massachusetts business
corporation under the Massachusetts Business Corporation Law.
41
SECTION 7.8. Additional Provisions. The By-Laws may
include further provisions for Shareholders' votes and meetings
and related matters not inconsistent with the provisions hereof.
ARTICLE 8
LIMITATION OF LIABILITY; INDEMNIFICATION
SECTION 8.1. Trustees, Shareholders, etc. Not
Personally Liable; Notice. The Trustees and officers of the
Trust, in incurring any debts, liabilities or obligations, or in
taking or omitting any other actions for or in connection with the
Trust, are or shall be deemed to be acting as Trustees or officers
of the Trust and not in their own capacities. No Shareholder
shall be subject to any personal liability whatsoever in tort,
contract or otherwise to any other Person or Persons in connection
with the assets or the affairs of the Trust or of any Portfolio,
and subject to Section 8.4 hereof, no Trustee, officer, employee
or agent of the Trust shall be subject to any personal liability
whatsoever in tort, contract, or otherwise, to any other Person or
Persons in connection with the assets or affairs of the Trust or
of any Portfolio, save only that arising from his own willful
misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of his office or the discharge
of his functions. The Trust (or if the matter relates only to a
particular Portfolio, that Portfolio) shall be solely liable for
any and all debts, claims, demands, judgments, decrees,
liabilities or obligations of any and every kind, against or with
respect to the Trust or such Portfolio in tort, contract or
otherwise in connection with the assets or the affairs of the
Trust or such Portfolio, and all Persons dealing with the Trust or
any Portfolio shall be deemed to have agreed that resort shall be
had solely to the Trust Property of the Trust or the Portfolio
Assets of such Portfolio, as the case may be, for the payment or
performance thereof.
The Trustees shall use their best efforts to ensure that
every note, bond, contract, instrument, certificate or undertaking
made or issued by the Trustees or by any officers or officer shall
give notice that this Declaration of Trust is on file with the
Secretary of The Commonwealth of Massachusetts and shall recite to
the effect that the same was executed or made by or on behalf of
the Trust or by them as Trustees or Trustee or as officers or
officer, and not individually, and that the obligations of such
instrument are not binding upon any of them or the Shareholders
individually but are binding only upon the assets and property of
the Trust, or the particular Portfolio in question, as the case
may be, but the omission thereof shall not operate to bind any
Trustees or Trustee or officers or officer or Shareholders or
Shareholder individually, or to subject the Portfolio Assets of
any Portfolio to the obligations of any other Portfolio.
42
SECTION 8.2. Trustees' Good Faith Action; Expert
Advice; No Bond or Surety. The exercise by the Trustees of their
powers and discretion hereunder shall be binding upon everyone
interested. Subject to Section 8.4 hereof, a Trustee shall be
liable for his own willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the
conduct of the office of Trustee, and for nothing else, and shall
not be liable for errors of judgment or mistakes of fact or law.
Subject to the foregoing, (i) the Trustees shall not be
responsible or liable in any event for any neglect or wrongdoing
of any officer, agent, employee, consultant, Investment Adviser,
Administrator, Distributor or Principal Underwriter, Custodian or
Transfer Agent, Dividend Disbursing Agent, Shareholder Servicing
Agent or Accounting Agent of the Trust, nor shall any Trustee be
responsible for the act or omission of any other Trustee; (ii) the
Trustees may take advice of counsel or other experts with respect
to the meaning and operation of this Declaration of Trust and
their duties as Trustees, and shall be under no liability for any
act or omission in accordance with such advice or for failing to
follow such advice; and (iii) in discharging their duties, the
Trustees, when acting in good faith, shall be entitled to rely
upon the books of account of the Trust and upon written reports
made to the Trustees by any officer appointed by them, any
independent public accountant, and (with respect to the subject
matter of the contract involved) any officer, partner or
responsible employee of a Contracting Party appointed by the
Trustees pursuant to Section 5.2 hereof. The Trustees as such
shall not be required to give any bond or surety or any other
security for the performance of their duties.
SECTION 8.3. Indemnification of Shareholders. If any
Shareholder (or former Shareholder) of the Trust shall be charged
or held to be personally liable for any obligation or liability of
the Trust solely by reason of being or having been a Shareholder
and not because of such Shareholder's acts or omissions or for
some other reason, the Trust (upon proper and timely request by
the Shareholder) shall assume the defense against such charge and
satisfy any judgment thereon, and the Shareholder or former
Shareholder (or the heirs, executors, administrators or other
legal representatives thereof, or in the case of a corporation or
other entity, its corporate or other general successor) shall be
entitled (but solely out of the assets of the Portfolio of which
such Shareholder or former Shareholder is or was the holder of
Shares) to be held harmless from and indemnified against all loss
and expense arising from such liability.
SECTION 8.4. Indemnification of Trustees, Officers,
etc. Subject to the limitations set forth hereinafter in this
Section 8.4, the Trust shall indemnify (from the assets of the
Portfolio or Portfolios to which the conduct in question relates)
each of its Trustees and officers (including Persons who serve at
43
the Trust's request as directors, officers or trustees of another
organization in which the Trust has any interest as a shareholder,
creditor or otherwise [hereinafter, together with such Person's
heirs, executors, administrators or personal representative,
referred to as a "Covered Person"]) against all liabilities,
including but not limited to amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and expenses,
including reasonable accountants' and counsel fees, incurred by
any Covered Person in connection with the defense or disposition
of any action, suit or other proceeding, whether civil or
criminal, before any court or administrative or legislative body,
in which such Covered Person may be or may have been involved as a
party or otherwise or with which such Covered Person may be or may
have been threatened, while in office or thereafter, by reason of
being or having been such a Trustee or officer, director or
trustee, except with respect to any matter as to which it has been
determined that such Covered Person (i) did not act in good faith
in the reasonable belief that such Covered Person's action was in
or not opposed to the best interests of the Trust or (ii) had
acted with willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of such
Covered Person's office (either and both of the conduct described
in clauses (i) and (ii) of this sentence being referred to
hereafter as "Disabling Conduct"). A determination that the
Covered Person is entitled to indemnification may be made by (i) a
final decision on the merits by a court or other body before whom
the proceeding was brought that the Covered Person to be
indemnified was not liable by reason of Disabling Conduct, (ii)
dismissal of a court action or an administrative proceeding
against a Covered Person for insufficiency of evidence of
Disabling Conduct, or (iii) a reasonable determination, based upon
a review of the facts, that the indemnitee was not liable by
reason of Disabling Conduct by (a) a vote of a majority of a
quorum of Trustees who are neither "interested persons" of the
Trust as defined in Section 2(a)(19) of the 1940 Act nor parties
to the proceeding, or (b) an independent legal counsel in a
written opinion. Expenses, including accountants' and counsel
fees so incurred by any such Covered Person (but excluding amounts
paid in satisfaction of judgments, in compromise or as fines or
penalties), may be paid from time to time by the Portfolio or
Portfolios to which the conduct in question related in advance of
the final disposition of any such action, suit or proceeding;
provided, that the Covered Person shall have undertaken to repay
the amounts so paid to such Portfolio or Portfolios if it is
ultimately determined that indemnification of such expenses is not
authorized under this Article 8 and (i) the Covered Person shall
have provided security for such undertaking, (ii) the Trust shall
be insured against losses arising by reason of any lawful
advances, or (iii) a majority of a quorum of the disinterested
Trustees, or an independent legal counsel in a written opinion,
shall have determined, based on a review of readily available
44
facts (as opposed to a full trial-type inquiry), that there is
reason to believe that the Covered Person ultimately will be found
entitled to indemnification.
SECTION 8.5. Compromise Payment. As to any matter
disposed of by a compromise payment by any such Covered Person
referred to in Section 8.4 hereof, pursuant to a consent decree or
otherwise, no such indemnification either for said payment or for
any other expenses shall be provided unless such indemnification
shall be approved (i) by a majority of a quorum of the
disinterested Trustees or (ii) by an independent legal counsel in
a written opinion. Approval by the Trustees pursuant to clause
(i) or by independent legal counsel pursuant to clause (ii) shall
not prevent the recovery from any Covered Person of any amount
paid to such Covered Person in accordance with either of such
clauses as indemnification if such Covered Person is subsequently
adjudicated by a court of competent jurisdiction not to have acted
in good faith in the reasonable belief that such Covered Person's
action was in or not opposed to the best interests of the Trust or
to have been 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 such Covered
Person's office.
SECTION 8.6. Indemnification Not Exclusive, etc. The
right of indemnification provided by this Article 8 shall not be
exclusive of or affect any other rights to which any such Covered
Person may be entitled. As used in this Article 8, a
"disinterested" Person is one against whom none of the actions,
suits or other proceedings in question, and no other action, suit
or other proceeding on the same or similar grounds is then or has
been pending or threatened. Nothing contained in this Article 8
shall affect any rights to indemnification to which personnel of
the Trust, other than Trustees and officers, and other Persons may
be entitled by contract or otherwise under law, nor the power of
the Trust to purchase and maintain liability insurance on behalf
of any such Person.
SECTION 8.7. Liability of Third Persons Dealing with
Trustees. No person dealing with the Trustees shall be bound to
make any inquiry concerning the validity of any transaction made
or to be made by the Trustees or to see to the application of any
payments made or property transferred to the Trust or upon its
order.
45
ARTICLE 9
DURATION; REORGANIZATION; AMENDMENTS
SECTION 9.1. Duration and Termination of Trust. Unless
terminated as provided herein, the Trust shall continue without
limitation of time and, without limiting the generality of the
foregoing, no change, alteration or modification with respect to
any Portfolio or Series of Shares shall operate to terminate the
Trust. The Trust may be terminated at any time by a Majority of
the Trustees, subject to the favorable vote of the holders of not
less than a majority of the Shares outstanding and entitled to
vote of each Portfolio of the Trust, or by an instrument or
instruments in writing without a meeting, consented to by the
holders of not less than a majority of such Shares, or by such
greater or different vote of Shareholders of any Series as may be
established by the Certificate of Designation by which such Series
was authorized. Upon termination, after paying or otherwise
providing for all charges, taxes, expenses and liabilities,
whether due or accrued or anticipated as may be determined by the
Trustees, the Trust shall in accordance with such procedures as
the Trustees consider appropriate reduce the remaining assets to
distributable form in cash, Securities or other property, or any
combination thereof, and distribute the proceeds to the
Shareholders, in conformity with the provisions of Section 6.2(d)
hereof.
SECTION 9.2. Reorganization. The Trustees may sell,
convey and transfer all or substantially all of the assets of the
Trust, or the assets belonging to any one or more Portfolios, to
another trust, partnership, association or corporation organized
under the laws of any state of the United States, or may transfer
such assets to another Portfolio of the Trust, in exchange for
cash, Shares or other Securities (including, in the case of a
transfer to another Portfolio of the Trust, Shares of such other
Portfolio), or to the extent permitted by law then in effect may
merge or consolidate the Trust or any Portfolio with any other
Trust or any corporation, partnership, or association organized
under the laws of any state of the United States, all upon such
terms and conditions and for such consideration when and as
authorized by vote or written consent of a Majority of the
Trustees and approved by the affirmative vote of the holders of
not less than a majority of the Shares outstanding and entitled to
vote of each Portfolio whose assets are affected by such
transaction, or by an instrument or instruments in writing without
a meeting, consented to by the holders of not less than a majority
of such Shares, and/or by such other vote of any Series as may be
established by the Certificate of Designation with respect to such
Series. Following such transfer, the Trustees shall distribute
the cash, Shares or other Securities or other consideration
received in such transaction (giving due effect to the assets
46
belonging to and indebtedness of, and any other differences among,
the various Portfolios of which the assets have so been
transferred) among the Shareholders of the Portfolio of which the
assets have been so transferred; and if all of the assets of the
Trust have been so transferred, the Trust shall be terminated.
Nothing in this Section 9.2 shall be construed as requiring
approval of Shareholders for the Trustees to organize or assist in
organizing one or more corporations, trusts, partnerships,
associations or other organizations, and to sell, convey or
transfer less than substantially all of the Trust Property or the
assets belonging to any Portfolio to such organizations or
entities.
SECTION 9.3. Amendments; etc. All rights granted to
the Shareholders under this Declaration of Trust are granted
subject to the reservation of the right to amend this Declaration
of Trust as herein provided, except that no amendment shall repeal
the limitations on personal liability of any Shareholder or
Trustee or the prohibition of assessment upon the Shareholders
(otherwise than as permitted under Section 6.2(9)) without the
express consent of each Shareholder or Trustee involved. Subject
to the foregoing, the provisions of this Declaration of Trust
(whether or not related to the rights of Shareholders) may be
amended at any time, so long as such amendment does not adversely
affect the rights of any Shareholder with respect to which such
amendment is or purports to be applicable and so long as such
amendment is not in contravention of applicable law, including the
1940 Act, by an instrument in writing signed by a Majority of the
Trustees (or by an officer of the Trust pursuant to the vote of a
Majority of the Trustees). Any amendment to this Declaration of
Trust that adversely affects the rights of all Shareholders may be
adopted at any time by an instrument in writing signed by a
Majority of the Trustees (or by an officer of the Trust pursuant
to a vote of a Majority of the Trustees) when authorized to do so
by the vote in accordance with Section 7.1 hereof of Shareholders
holding a majority of all the Shares outstanding and entitled to
vote, without regard to Series, or if said amendment adversely
affects the rights of the Shareholders of less than all of the
Portfolios or of less than all of the Classes of Shares of any
Portfolio, by the vote of the holders of a majority of all the
Shares entitled to vote of each Portfolio or of each Class, as the
case may be, so affected. Subject to the foregoing, any such
amendment shall be effective when the terms thereof have been duly
adopted, as aforesaid. A certificate (which may be a part of such
instrument) to the effect that such amendment has been duly
adopted, and setting forth the circumstances thereof, shall be
executed and acknowledged by a Trustee or officer of the Trust and
filed as provided in Section 9.4 hereof (but such filing shall not
be a prerequisite to the effectiveness of such amendment).
47
SECTION 9.4. Filing of Copies of Declaration and
Amendments. The original or a copy of this Declaration and of
each amendment hereto (including each Certificate of Designation
and Certificate of Termination), shall be kept at the office of
the Trust where it may be inspected by any Shareholder, and one
copy of each such instrument shall be filed with the Secretary of
The Commonwealth of Massachusetts, as well as with any other
governmental office where such filing may from time to time be
required by the laws of Massachusetts (but such filing shall not
be a prerequisite to the effectiveness of this Declaration or any
such amendment). A restated Declaration, integrating into a
single instrument all of the provisions of this Declaration which
are then in effect and operative, may be executed from time to
time by a Majority of the Trustees and shall, upon filing with the
Secretary of The Commonwealth of Massachusetts, be conclusive
evidence of all amendments contained therein and may thereafter be
referred to in lieu of the original Declaration and the various
amendments thereto.
ARTICLE 10
MISCELLANEOUS
SECTION 10.1. Governing Law. This Declaration of Trust
is executed and delivered in The Commonwealth of Massachusetts and
with reference to the laws thereof, and the rights of all parties
and the construction and effect of every provision hereof shall be
subject to and construed according to the laws of said
Commonwealth.
SECTION 10.2. Counterparts. This Declaration of Trust
and any amendment thereto may be simultaneously executed in
several counterparts, each of which so executed shall be deemed to
be an original, and such counterparts, together, shall constitute
but one and the same instrument, which shall be sufficiently
evidenced by any such original counterpart.
SECTION 10.3. Reliance by Third Parties. Any
certificate executed by an individual who, according to the
records in the office of the Secretary of The Commonwealth of
Massachusetts appears to be a Trustee hereunder, certifying to:
(a) the number or identity of Trustees or Shareholders, (b) the
due authorization of the execution of any instrument or writing,
(c) the form of any vote passed as a meeting of Trustees or
Shareholders, (d) the fact that the number of Trustees or
Shareholders present at any meeting or executing any written
instrument satisfies the requirements of this Declaration of
Trust, (e) the form of any By-Law adopted, or the identity of any
officers elected, by the Trustees, or (f) the existence or non-
existence of any fact or facts which in any manner relate to the
affairs of the Trust, shall be conclusive evidence as to the
48
matters so certified in favor of any Person dealing with the
Trustees, or any of them, and the successors of such Person.
SECTION 10.4. References; Headings. The masculine
gender shall include the feminine and neuter genders. Headings
are placed herein for convenience of reference only and shall not
be taken as a part of this Declaration or control or affect the
meaning, construction or effect hereof.
SECTION 10.5. Use of the Name "Alliance". Alliance
Capital Management L.P. ("ACM") has consented to the use by the
Trust of the identifying name "Alliance" which is a property right
of ACM. The Trust will only use the name "Alliance" as a
component of its name and for no other purpose, and will not
purport to grant to any third party the right to use the name
"Alliance" for any purpose. ACM or any entity affiliated with ACM
may use or grant to others the right to use the name "Alliance",
as all or a portion of a corporate or business name or for any
commercial purpose, including a grant of such right to any other
investment company. At the request of ACM, the Trust will take
such action as may be required to provide its consent to the use
of such name by ACM, or any entity affiliated with ACM, or by any
Person to whom ACM or an entity affiliated with ACM shall have
granted the right to the use of the name "Alliance". Upon the
termination of any investment advisory or management agreement
into which ACM and the Trust may enter, the Trust shall, upon
request by ACM, cease to use the name "Alliance" as a component of
its name, and shall not use such name or initials as a part of its
name or for any other commercial purpose, and shall cause its
officers and Trustees to take any and all actions which ACM may
request to effect the foregoing and to reconvey to ACM or such
affiliate any and all rights to such name.
IN WITNESS WHEREOF, the undersigned has hereunto set his
hand and seal, for himself and his assigns, and has thereby
accepted the Trusteeship as the Initial Trustee of Alliance
Municipal Income Fund II hereby granted and agreed to the
provisions hereof, all as of the day and year first above written.
/s/ Xxxxxx X. Xxxxxxx
_________________________
Xxxxxx X. Xxxxxxx
49
The undersigned Settlor of Alliance Municipal Income Fund
II, hereby accepts, approves and authorizes the foregoing
Agreement and Declaration of Trust of Alliance Municipal Income
Fund II.
Dated: April 2, 1993
/s/ Xxxxx X. Xxxxx
__________________________
Xxxxx X. Xxxxx
50
ACKNOWLEDGMENTS
M A S S A C H U S E T T S
Suffolk, ss.: April 2, 1993
Then personally appeared the above named Xxxxxx X.
Xxxxxxx and acknowledged the foregoing instrument to be his free
act and deed.
Before me,
/s/
___________________________
Notary Public
My commission expires: 1/7/94
M A S S A C H U S E T T S
Suffolk, ss.: April 2, 1993
Then personally appeared the above named Xxxxx X. Xxxxx
and acknowledged the foregoing instrument to be his free act and
deed.
Before me,
/s/
____________________________
Notary Public
My commission expires: 1/7/94
51
00250151.AW1
